In March, Indian imports of Russian oil experienced a notable rebound, returning to levels close to normal after a three-month decrease. This recovery can be attributed to non-sanctioned vessels facilitating deliveries and a redirection of some supplies from Turkey.
According to five trade sources and shipping data, this uptick in oil flow to India, the world’s third-largest oil importer, has contributed to alleviating supply shortages and has helped to stabilize prices for competing oil grades from the Middle East. Earlier this year, Russian oil shipments to both India and China diminished significantly following U.S. sanctions imposed on January 10, aimed at reducing Moscow’s oil revenue by targeting producers, insurers, and shipping entities.
However, in March, India’s imports of Russian oil, predominantly Urals crude, surged back to around 1.54 million barrels per day (bpd), recovering from a drop to 1.1 million to 1.2 million bpd during the preceding three months due to concerns related to sanctions, as indicated by analytics firm Kpler. On the logistical front, freight rates for tankers transporting oil from Russian western ports to India spiked to a one-year high of $8 million.
This increase has encouraged a greater number of vessels to operate on this route, albeit at the cost of squeezing revenues for Russian oil sellers. Notably, Turkey’s largest oil refiner, Tupras, halted imports of Russian oil, which has further opened up supply channels for Asian markets.
Despite the challenges posed by sanctions, the price for Russian oil has recently dipped below the $60 per barrel cap set by the Group of Seven nations, allowing access to Western shipping services. India, which has positioned itself as the leading buyer of Russian crude sold at a discount since the sanctions followed Russia’s invasion of Ukraine in 2022, emphasizes compliance with United Nations sanctions while navigating the complexities of potential secondary sanctions from the United States.