Cheap Russian oil cuts OPEC’s share of India imports to record-low 50%

By Nidhi Verma

NEW DELHI (Reuters) – The annual share of OPEC’s oil in India’s crude imports fell to its lowest level ever in 2023 while that of discounted Russian barrels surged to an all-time high, data obtained from trade and industry sources show.

India, the world’s third-biggest oil importer and consumer, has long relied on the nearby middle eastern nations for meeting most of its oil needs to cut freight costs.

Last year for the first time India imported nearly equal quantities of oil from the Organisation of Petroleum Exporting Countries (OPEC) members as it did from non-members, the data shows.

The South Asian nation imported an average 4.65 million barrels per day (bpd) oil in 2023, up 2% from the previous year.

OPEC’s share in India’s crude oil diet plunged to about 49.6% in the first nine months of this fiscal year from April compared with 64.5% a year earlier, the data show.

Altered trade flows due to geopolitical tensions and costlier shipments from some traditional suppliers have expedited India’s efforts to diversify its import sources and tap cheaper supplies from even far flung areas such as Russia.

Imports of Russian oil accounted for about 36% of India’s total crude purchases in 2023 at 1.66 million bpd, the data showed. In 2022, India imported an average 651,800 bpd Russian oil, the data shows.

Discounted Russian oil also curtailed India’s intake of Middle Eastern oil to the lowest level ever, the calculations show.

Russian oil became cheaper for India as western nations shunned purchases from Moscow in retaliation for its invasion of Ukraine.

However in December India’s imports of Russian oil fell to the lowest in a year as some shipments were diverted after Washington tightened rules including toughened scrutiny by banks and service providers to ensure that cargoes do not breach the $60 per barrel price cap.

The South Asian nation shipped in 1.34 million bpd of Russian oil last month, a decline of about 16.3% from November, as some cargoes were diverted, the data showed.

Oil minister Hardeep Singh Puri has said that cargoes were diverted due to pricing.

Last year Russia was the top oil supplier to India, replacing Iraq, which is now at No. 2, with Saudi Arabia tumbling to third position.

(Reporting by Nidhi Verma; Editing by Hugh Lawson)