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India’s reliance on Russian crude continues, imports increase by 14% in January.

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In Short:

Russia was the top supplier of oil to India in January, with a 41% year-on-year jump in supply value. This trend is likely to continue despite the Red Sea crisis. Traditional suppliers in the Gulf region saw a decline in imports. Russia’s oil prices, even with discounts reduced, are still attractive to India amid market risks. India’s total oil import bill increased by 4% in January.

Russia Tops as India’s Key Oil Supplier

NEW DELHI : Russia has maintained its position as the leading oil supplier to India in January, contributing almost a third of the total crude imports, as per the commerce ministry data.

Russian Oil Supply Soars

With a value of $4.47 billion, the crude oil supply from Russia saw a significant 41% increase year-on-year. Sequentially, the crude imports rose 14% from $3.92 billion in December 2023.

Import Trends and Challenges

In 2023, Moscow emerged as the top crude supplier to India, accounting for over 30% of total imports. Despite recent Red Sea crisis developments affecting Russian oil shipments, the country continues to lead the charts in early 2024.

The situation has forced oil tankers to seek alternate routes, leading to revised costs and calculations for traders.

Changes in Import Sources

While Russia’s oil supplies to India surged, traditional suppliers from the Gulf region experienced a decline in shipments. Iraq was the second-largest crude oil source in December, followed by a significant drop in supplies from Saudi Arabia.

Government’s Affordability Strategy

Petroleum minister Hardeep Singh Puri reiterated the importance of acquiring cheaper oil from diverse regions to maintain affordability, availability of fuel, and ensure energy security.

Market Dynamics and Prices

Despite the stability from discounted Russian oil prices, ongoing conflicts and tensions, including the recent attack on Russian oil refineries by Ukraine, have resulted in price escalations exceeding $85 per barrel.

As of now, Brent crude for the May contract is trading at $85.88 per barrel.

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