India is doubling its imports of Russian oil, even though OPEC exporters are seeing their share fall. Indeed, the Organization of Petroleum Exporting Countries (OPEC) recorded a historically low share of India’s oil imports between April and September. This is due to the decision by India, the world’s third largest importer of crude oil, to more than double its purchases of Russian oil, according to industry and trade data compiled by Reuters.
A Significant Increase
Between April and September, the first half of India’s 2023/2024 fiscal year, Indian imports of Russian crude oil more than doubled to 1.76 million barrels per day, compared with 780,000 bpd in the same period of the 2022/2023 fiscal year, according to vessel tracking data cited by Reuters.
The reasons behind this trend
India is a key player in the global oil market, purchasing over 80% of the crude oil it consumes from abroad. Over the past year and a half, the country has significantly increased its imports of cheaper Russian crude oil, which is banned in the West due to sanctions.
Consequences for OPEC
In the first half of fiscal 2023/2024, Russia held a 40% share of India’s crude oil imports, while the share of OPEC exporters fell to a record 46%, according to a Reuters analysis of data dating back to fiscal 2001/2002. In the period April to September 2022, OPEC’s share of India’s oil imports was 63%.
Economic and geopolitical impact
Indian refiners have significantly increased their imports from Russia, while reducing their purchases from Saudi Arabia, the world’s leading crude oil exporter and Russia’s key partner in the OPEC+ agreement. After lower imports of Russian crude oil in July and August than in previous months, India’s imports of Russian oil rebounded in September.
India’s surge in Russian oil imports to the detriment of OPEC calls into question the organization’s traditional influence on oil markets. OPEC now faces fierce competition, and this could have long-term repercussions on world oil prices.
Ultimately, India’s decision to increase its purchases of Russian oil shows how economic and geopolitical considerations intertwine in the complex world of energy. It is essential to keep a close eye on this trend and its consequences for India, Russia and OPEC.
