India is gradually surpassing China on multiple fronts. With foreign companies establishing their production plants in India, new developments indicate that India has overtaken China as the world’s largest importer of Russian oil as of July. This shift in trade dynamics arose because Chinese refiners were purchasing less fuel due to diminished profit margins in fuel production, as reflected in comparative import data.
India’s Remarkable Turnaround
Data from business and industry sources reveal that Russian crude oil accounted for a remarkable 44% of India’s total imports last month, amounting to a record high of 2.07 million barrels per day (BPD). This figure represents a 4.2% increase from June and a 12% rise compared to the previous year. In contrast, July’s oil imports from Russia to China, based on customs data, were at 1.76 million BPD, indicating India’s lead in this sector.
Following the sanctions imposed by Western countries against Moscow in response to Russia’s invasion of Ukraine, Indian refiners have increasingly focused on purchasing Russian oil sold at discounted rates. According to an Indian refining source, the demand for Russian oil in India is expected to continue growing unless sanctions become more stringent. Since the beginning of the Ukraine conflict in February 2022, India’s trade with Russia has surged, primarily fueled by oil and fertilizer imports, helping to control global prices and manage inflation.
Shifts in Oil Supply Dynamics
India’s increasing oil imports are altering the traditional flow of Russian ESPO blend crude oil from South Asia. Reports indicate that ESPO imports to India surged to 188,000 BPD in July, aided by the use of large Suezmax vessels. Typically, refiners in Northeast China, due to their geographical proximity, have been the largest buyers of ESPO, but a decline in fuel demand has led to a decrease in their purchasing activity.
Other Key Suppliers
In July, Iraq remained India’s second-largest oil supplier, followed by Saudi Arabia and the United Arab Emirates. Data shows that India’s crude oil purchases from the Middle East increased by 4%, raising the region’s share in India’s total oil mix from 38% in June to 40% in July.
Summary of India’s Oil Import Dynamics
| Country | July Oil Imports (Million BPD) | Share of Total Imports |
|---|---|---|
| Russia | 2.07 | 44% |
| China | 1.76 | N/A |
| Iraq | N/A | 2nd Largest Supplier |
| Saudi Arabia | N/A | 3rd Largest Supplier |
| United Arab Emirates | N/A | 4th Largest Supplier |
