In a notable shift in global oil trade dynamics, India is poised to regain its position of sourcing the largest volume of crude oil from Russia after a brief setback in February. Earlier that month, Iraq had surpassed Russia as India’s top oil supplier, marking a significant change in the supply chain. However, recent developments suggest that Moscow is on track to reclaim its leading role in India’s energy imports, driven largely by geopolitical tensions in the Middle East and strategic adjustments by Indian refiners.
During February, Indian refiners deliberately scaled back their intake of Russian crude, with imports dropping by approximately 32% compared to the same period last year. This reduction brought Russian oil shipments down to about 1 million barrels per day, roughly half of the peak volumes recorded in June of the previous year. The decrease was part of a broader strategy by New Delhi to balance its energy portfolio amid rising international pressure and evolving diplomatic relations, particularly with the United States.
India’s decision to temporarily reduce Russian oil imports played a crucial role in facilitating an interim trade agreement with Washington. This arrangement allowed India to navigate complex geopolitical waters while simultaneously increasing its reliance on oil from Middle Eastern countries. In fact, February saw India’s oil imports from Iraq surge to a two-year high of 1.18 million barrels per day, while purchases from Saudi Arabia climbed to nearly 998,000 barrels daily, the highest since December 2021. Consequently, the Middle East’s share in India’s overall crude oil imports rose to nearly 59%, marking the largest proportion since August 2022.
Despite this pivot towards Middle Eastern crude, the outbreak of conflict between the United States and Israel against Iran on February 28 has disrupted shipments passing through the critical Strait of Hormuz. This disruption has prompted India to swiftly adjust its procurement strategy once again. While February’s Russian oil imports were down 32% year-on-year and slightly below January’s figures by 1.7%, volumes have rebounded sharply in March. Current estimates indicate that Russian crude shipments to India have climbed back to around 1.8 million barrels per day, with projections suggesting they could reach between 2 million and 2.2 million barrels daily by the end of the month.
Experts like Sumit Ritolia, lead research analyst at the ship tracking firm Kpler, emphasize that Russian crude remains a cornerstone of India’s oil import strategy despite recent fluctuations. Government officials have also highlighted a significant reduction in India’s dependence on Middle Eastern oil amid ongoing supply disruptions, noting that approximately 70% of the country’s crude oil now comes from alternative sources. In addition to Russia and the Middle East, India has notably increased its imports from Brazil, which has emerged as the fourth-largest supplier, following the United Arab Emirates.
These shifting patterns underscore India’s efforts to diversify its energy sources in response to global geopolitical uncertainties and supply chain challenges. As the world’s third-largest oil importer and consumer, India’s strategic balancing act between Russian crude, Middle Eastern supplies, and emerging markets like Brazil will continue to shape its energy security and economic stability in the months ahead.
