As less oil is likely to be available from Russia due to Western sanctions, Indian refiners have started to make up the shortfall by purchasing more Middle Eastern and African crude grades.
“India already imported more Middle Eastern barrels in December, with an increase mostly in Iraqi and UAE (United Arab Emirates) grades, Emma Li, senior market analyst at Vortexa told Invezz.
The Western powers, especially the US, UK, and Europe have recently threatened to impose further sanctions on tankers carrying Russian oil.
In addition, incumbent US President Joe Biden was also planning to impose further sanctions on Russian crude oil exports before Republican Donald Trump took office at the White House on January 20.
In such a scenario, the oil supply from Russia is likely to be affected.
There were also concerns that Iranian crude oil exports would be affected under Trump’s presidency.
Trump is likely to pursue stricter compliance with sanctions against Iran, something the Biden administration avoided.
Most of Iranian crude oil is exported to China currently. However, recent reports have suggested even China was importing more Middle Eastern oil in the last few weeks.
India’s oil imports
India imported around 4.46 million barrels per day of crude oil in December, up nearly 4% on a month-on-month basis, according to data from Vortexa.
Higher imports from Iraq offset declines from Russia, the data showed.
India’s crude oil imports from Russia declined by 13% on a month-on-month basis to just shy of 1.40 million barrels per day during December, Vortexa data showed.
Imports from Russia were at 1.61 million barrels per day in November.
However, Russia remained the largest crude oil supplier to the country with a share of 31% in total shipments.
Li added:
With Russia exports (to India) declined to 17-month low in December, India’s January imports will remain subdued.
With the share of Russian and Saudi Arabian crude oil supplies declining in December, imports were higher from the UAE and Iraq.
India imported around 1.1 million barrels per day of crude oil from Iraq, up nearly 50% from November, data from Vortexa showed.
In the first seven days of January, Iraq supplied 1.53 million barrels per day of crude oil to India, the data showed.
India purchased 494,838 barrels per day of crude oil from the UAE in December, considerably higher than the previous month. In the first week of January 2025, imports from UAE were at 160,140 barrels per day, Vortexa data showed.
According to Vortexa, Angola replaced the US as the fifth largest crude oil supplier to India in December. Imports from the African country were at 228,400 barrels per day last month.
Nigeria also supplied 207,221 barrels per day of crude oil to India in December.
Russian oil supply
Amid talks of more sanctions on Russian crude supply, the country remains one of the top exporters of the fuel.
Russia has been successful in using a shadow fleet of tankers to transport its crude oil to other countries over the last couple of years. But, recent sanctions could change that.
Li said:
We have seen that primarily US and secondarily EU sanctions are most effective at stemming tanker employment, with UK-only sanctioned vessels still calling at India’s ports.
“Very large-scale designations of tankers will likely tighten the Russian-trading fleet, although with Urals recently hovering around the price cap level, we did see some involvement of more “mainstream” operators in Russian liftings.”
According to Commerzbank AG, less supply from Russia is likely to be available in the coming months, which is supportive of oil prices.
This also enabled Saudi Arabia to raise its official selling price for exports to Asia and Europe in February.
However, Li believes that if Russian oil continues to be supplied at a discount to Middle Eastern grades, other vessels “can lift the volumes unless the price cap is lowered to $40/bbl, which is also being considered.”
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