Indian Refiners Buying Oil From Russia Makes Good Economics: Global Energy Analyst

With India's oil imports from Russia touching a record high of 1.96 million barrels per day (bpd) last month, a celebrated Indian expert and commentator on global energy issues has backed New Delhi's burgeoning crude trade from Moscow.

Narendra Taneja, who serves as the chairman of New Delhi-based think tank the Independent Energy Policy Institute, on Tuesday stated that Indian refiners would continue to snap up Russian oil as it makes "good economics" for them.

Taneja also noted that Russian grades were of good quality and were being made available at steep discounts compared to US Brent crude and oil from Middle Eastern nations.

Indo-Russian Relations

Export of Russian Crude & Oil Products to India Hit 32Mln Tonnes in 2022

25 May 2023, 14:01

"Russian oil is good quality and available at attractive prices. You buy oil from whoever offers you a better deal. It is all about economics. It makes good economics for Indian refiners to buy from Russia. It has nothing to do with politics. Indian refiners will continue to buy Russian oil as long as the economics remains attractive", the international energy analyst told Sputnik on Tuesday.

Taneja's comments come against the backdrop of India breaking all previous records regarding its oil purchases from Russia.

As per energy cargo tracking firm Vortexa, New Delhi's oil purchases from Moscow saw a 15 per cent month-on-month jump in May compared to its figures in April.

With a 42 per cent share in India's oil market, Russian crude imports have now surpassed the combined purchases from traditional suppliers Saudi Arabia, Iraq, the UAE, and the US.

Russia's share in New Delhi's oil imports is the highest of a single country in the past decade.

Despite the declining share of Arab countries in India's oil imports, Taneja reckons that Indian refiners will continue to maintain healthy imports from traditional suppliers like Saudi Arabia, Kuwait, and Iraq even if they do not offer any attractive discount on the price – which they do not.

According to him, India's strategy is to import oil from as many countries as possible and not depend on any one country: this is part of India's energy security doctrine, to buy oil from as many sources as possible.

On being specifically asked if Russian imports could breach the two million bpd barrier and accomplish a share of 50 per cent in India's oil imports, the energy specialist noted that it depends on multiple factors, such as the price of oil in global markets, rate of inflation at home, and overall GDP growth in the country.

"If oil prices globally go higher than $90 per barrel and Russia still offers attractive discounts then chances are Indian refiners may buy even more oil from Moscow. It all depends on how attractive are discounts offered. It is all about economics. It has nothing to do with politics", Taneja summed up, while emphasizing that the Indian oil imports from Russia have nothing to do with its military operation in Ukraine.

Russia launched its special military operation in neighbouring Ukraine last February, resulting in US and Western-imposed sanctions on Moscow.

Since then, India has become one of Moscow's leading trade partners, purchasing Russian oil at a highly discounted price, with overall trade between the two nations touching a record level of $44.4 billion during the last fiscal.

Indian Refiners Buying Oil From Russia Make Good Economics: Global Energy Analyst