New Delhi: Even as New Delhi and Moscow discussed closer trade ties at the BRICS Summit this weekend, preliminary data suggests Indian imports of Russian crude have declined in September. India imported around 1.42 million barrels per day (mbpd) of Russian crude in the first 14 days of September, about 30 percent lower than the August average of around 2.1 mbpd, according to data from trade intelligence firm Kpler.
Experts attributed the decline to attacks on Russian oil infrastructure that have tightened the availability of barrels. “We expect India’s Russian crude imports to soften in September compared with August, primarily due to tighter availability of Russian barrels and increased competition from Chinese buyers,” Nikhil Dubey, lead analyst, oil markets at Kpler, told ThePrint.
The mid-month figures are preliminary and could change as more cargoes are loaded, shipped and recorded over the course of the month.
Russian crude imports for the full month are expected to rise to around 1.7-1.9 mbpd, Dubey said, as additional cargoes which will be loaded towards the end of September could increase the share of Russian oil in India’s crude basket.
Iraq has emerged as a key alternative source for Indian refiners, with imports rising sharply in September. India imported around 535,000 barrels per day of Iraqi crude in the first 14 days of the month, more than 200 percent higher than the August average of 163,000 barrels per day, preliminary data showed.
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Russian supply faces disruptions
The decline comes as continued Ukrainian attacks on Russian oil infrastructure have affected loading activity at key terminals. “Continued attacks on Russian oil infrastructure, such as the Sheskharis crude-loading terminal, have affected loading activity. Lower loadings in August are therefore expected to translate into reduced Russian crude arrivals into India in September,” Dubey said.
Notably, US President Donald Trump Sunday called on his Ukrainian counterpart Volodymyr Zelenskyy to stop targeting Russian oil infrastructure, saying the attacks were causing a shortage that is “hurting the world”.
The reduction in Russian supplies assumes greater significance for India as supplies from some traditional Gulf sources face uncertainty amid the ongoing West Asia conflict.
Saudi Arabia temporarily shut its East-West oil pipeline last week following attacks on the infrastructure. The pipeline carries around 4-5 mbpd of crude from the oil-producing east to Saudi Arabia’s Red Sea coast, providing an alternative route that avoids the Strait of Hormuz.
The disruption has also raised concerns over global oil supplies. Brent crude rose more than 3 percent Monday to around $107.81 amid the closure of the East-West pipeline and the blockade of the Bab el-Mandab strait, according to a Reuters report.
Kpler data showed India imported around 430,000 barrels per day of Saudi crude in the first half of September, up from around 315,000 barrels per day in August. However, Saudi supplies to India could ease in the remainder of the month as almost all the crude received so far was sourced through the East-West pipeline.
With Russian and Gulf supplies tightening, Indian refiners are likely to turn to West African and South American crude, depending on availability and freight economics.
Iraq emerges as key alternative
Iraq has already emerged as a major beneficiary of the shift in India’s crude sourcing, amid its efforts to maintain and expand its export capacity. Its crude oil production rate exceeded 3 mbpd, while its average crude oil export rate in August was more than 2.2 mbpd, according to Iraqi News Agency.
A significant portion of Iraqi crude reaching India is being moved through alternative arrangements. According to Dubey, much of the oil is being transported through ship-to-ship transfers outside the Strait of Hormuz. Iraqi sellers bring the oil outside the strait using shuttle tankers before transferring it to larger vessels.
Iraq has also explored alternative western export routes that could provide additional access to Mediterranean markets. One proposed northern route would connect Iraq’s southern oil fields to Faysh Khabur near the Turkish border, providing access to the Kirkuk-Ceyhan pipeline and the Mediterranean port of Ceyhan in Türkiye.
Another proposed western route would connect Haditha to Syria’s Banias port, potentially restoring an older oil corridor between the two countries and providing Iraq with another outlet to the Mediterranean.
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Venezuela barrels gain relevance
Venezuelan crude is also becoming increasingly important in India’s import basket as refiners seek alternatives. India has consistently imported Venezuelan crude since April, with imports reaching a high of around 350,000 barrels per day in August.
The preliminary September data showed imports from Venezuela at around 150,000 barrels per day in the first half of the month, with volumes expected to rise in the remainder of the month.
“Venezuelan crude has historically been part of India’s crude slate. We have seen in previous periods that whenever sanctions were eased, even for a relatively short window, these barrels found their way back into India,” Dubey said.
“In today’s market, with physical crude availability significantly tighter, Venezuelan grades become particularly relevant as an alternative source of supply,” he added. Dubey expects Venezuelan crude to remain part of India’s crude diet, although monthly volumes are likely to fluctuate depending on availability.
India has also been sourcing crude from the United States, with imports at around 137,000 barrels per day in the first half of September.
However, US crude offers limited scope as a direct replacement for Russian and some Gulf grades, as much of the additional US supply consists of lighter crude, while several Indian refineries are configured to process heavier grades.
The shifting import pattern suggests Indian refiners are increasingly having to balance crude quality, freight economics and availability as disruptions affect some traditional sources.
(Edited by Chingkheinganbi Mayengbam)
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