India Currently Imports 40% Of Its Seaborne Crude Oil From Russia

India currently imports 40% of its seaborne crude oil from Russia. Over the past three months, the dependency has resulted in an average import volume of 1.6 million barrels per day (mbpd), representing an astounding 1000% increase over the pre-Ukraine invasion levels in 2021.

The recent spike in Russian crude oil imports has significantly increased the average sailing distance for tankers delivering to India.

The average distance has risen by 10% this year, resulting in an 8% rise in total tonne miles despite a 2% decline in overall volumes.

The average sailing distance has increased by 25% compared to 2021. The shift began in 2022, as Indian buyers sought alternatives to Western suppliers.

Previously, the European Union and the United States accounted for over 65% of Russia’s seaborne crude oil exports.

However, in response to sanctions imposed after Russia’s invasion of Ukraine, Russia has diverted its exports, with India emerging as a major buyer alongside China.

Since the middle of 2023, India has continuously imported 35-40% of Russia’s seaborne crude oil, exceeding China’s purchasing volume.

India’s shift to Russian crude has dramatically impacted its import patterns.

Previously, India sourced 70% of its seaborne crude oil from the Persian Gulf, but this has now reduced to 45% as Russian oil imports have increased.

The Persian Gulf has diverted its exports to the Mediterranean and North Europe. The shift has also had an impact on the tanker types used for transport.

Aframax and Suezmax tankers currently handle nearly all of Russia’s crude oil exports to India, accounting for 55% of Indian crude oil imports, up from 45% in 2021. Very Large Crude Carriers (VLCC) are less commonly used.

Additionally, the average age of ships discharging in India has increased, with vessels serving Russian exports being older on average.

Ships discharging in India are now four years older than in 2021, and the share of vessels older than 20 years has increased from 2% to 13%.

The International Energy Agency predicts that India’s oil demand will continue to rise, while Russian production is unlikely to meet this rising demand.

As a result, India may need to find alternative suppliers to meet its future demand.

Reference: BIMCO