India’s Russian oil binge drags down OPEC’s share to lowest in 2022

NEW DELHI  – Russia became the third-largest oil supplier to India in 2022, making up about 15 percent of total purchases, dragging down OPEC’s share to the lowest in more than a decade, data obtained from industry sources show.

Refiners in India, the world’s third-biggest oil consumer and importer, have been gorging on Russian oil sold at a discount after some Western companies shunned buying from Moscow following its invasion of Ukraine last February.

In 2021, Russia was at the 17th spot, supplying about 1 percent of India’s overall imports.

Last month India’s oil imports from Russia surged to an all-time high of 1.25 million barrels per day (bpd), about a quarter of overall 4.9 million bpd purchase, the data showed.

India’s December oil imports were the highest in seven months as refiners were drawn to Russian oil due to the deeper discounts offered ahead of a Dec. 5 embargo by Europe and a price cap by the European Union and G7 nations to cut Moscow’s oil revenue.

Members of the Organization of the Petroleum Exporting Countries (OPEC), mainly from the Middle East and Africa, saw their share in India’s crude imports shrinking to 64.5 percent in 2022, from a peak of 87 percent in 2008, a Reuters analysis of the data since 2006 showed.

Still, Iraq and Saudi Arabia remained India’s top two suppliers last year.

“India’s oil imports from Russia would continue to rise this year as well mainly because of discounts if there are no further stringent actions by the Western countries targetting Russian oil,” said an official at an Indian refiner who declined to be named as he was not authorised to speak to the media.

Russia remained the top oil supplier to India in December followed by Iraq and Saudi Arabia.

Higher intake of Russian oil reduced India’s appetite for African grades, whose share in 2022 imports declined to a 17-year low while that of Latin America plunged to the lowest in 15 years, the data show.

In April-December, the first nine months of this fiscal year, Russia replaced Saudi Arabia as the second largest oil supplier to India, while Iraq remained on the top spot, the data showed. Imports from Russia, about a fifth of India’s oil imports in April-December, led to OPEC’s share falling to about 61.5 percent, according to Reuters calculations.