As China competes, India’s oil imports from Russia are expected to peak in May

Russia continued to be India’s biggest crude supplier in April. India’s oil imports from Russia are expected to peak in May, increasing its market share to 36%, but a gradual rise month over month fueled speculation that imports from the nation may reach a peak in May. That is attributed to Chinese competition for oil.

According to energy cargo tracker Vortexa, Russia provided 1.68 million barrels per day (mbd) of oil to Indian refiners in April, a 4% increase from 1.61 mbd in March. In April, China purchased 1.3 million barrels per day of Russian goods by sea, while Europe imported 206,000 barrels daily.

India’s overall crude oil imports decreased from March to April by 3.5% to 4.6 mbd. From 33.8% in March to 36.4% in April, Russia’s proportion of India’s crude imports increased. Prior to the Russia-Ukraine war, this proportion was 0.2%.

The rise in imports of the much-reduced Russian oil has halted recently, though. The increase dropped to 1.8% in March and 4% in April after increasing consecutively by 29% in December and 26% in February.

Indian refiners to concentrate on Europe for exports

Saudi Arabia’s market share decreased to 14.5% from 21%, while Iraq’s share decreased to 17.6% from 18.4% in March. The UAE’s portion decreased from 6.5% to 4%. Africa and the US both made slight gains.

“India’s imports of Russian crude in April again broke records, although the growth rate month over month has moderated and may be reaching a peak this month.” The benefits of India’s imports of Russian crude would probably be limited by increased competition for Urals from China, according to Serena Huang, an analyst at Vortexa.

As it has sold at a substantial discount to the global benchmark Brent, Urals, the Russian flag-bearer for mid-sulfur crude, has been the biggest draw for both India and China. Since Urals are typically traded below the $60 per barrel cap on Russian oil set by the G7, shipping and paying for Urals are made easier.

April saw an increase in India’s imports of Urals of 9% over March, which saw a 5% month-on-month fall. After declining for several months, to 70% in March and 79% in January, Urals’ proportion of India’s imports of Russian oil increased to 73.6% in April. A different Russian grade, ESPO, had a nearly twofold increase in share from March to April, reaching 10.5%.

To 125,000 barrels per day in April, India’s imports of Russian refined goods decreased 31% sequentially. While Europe’s imports of Russian goods remained stable at about 479,000 barrels per day, China increased its imports by 44% to 321,000 barrels per day.

Exports to Europe have remained strong, Huang added, despite a supporting arbitrage, even if India’s clean product exports in April fell by 25% month over month.

April saw a decrease in India’s daily export of refined goods to Europe from 285,000 barrels per day in March to 264,000 barrels per day in April. Its daily exports to the US decreased from 106,000 barrels in March to 30,000 barrels in April. Better profits in the European market have caused Indian refiners to turn their attention away from the US. After resolving to substantially reduce its reliance on Russia, Europe, which was the largest market for Russian crude and processed goods before the Ukraine War, is now looking for supplies elsewhere in the world.