Introduction
India’s crude oil imports from its largest supplier, Russia, dropped to their lowest level since January 2023 in December, as six tankers carrying Sokol oil were unable to deliver due to payment issues amidst tightening sanctions, according to data intelligence firm Kpler.
Decline in India’s Russian Oil Imports
After India’s imports of Russian oil surged to a record high of 2.15 million barrels per day in May, imports fell sharply between November and December to 1.48 million barrels per day last month, according to Kpler data.
Payment Issues and Their Impact on Imports
The Indian refiner, which purchased an average of 140,000 barrels per day of Sokol in 2023, was unable to receive any similar shipments last month. Viktor Katona, the lead analyst for crude oil at Kpler, explained in an email that Sakhalin-1 LLC, which extracts crude oil from Eastern Russia, was unable to open a bank account in the United Arab Emirates to enable buyers to pay in dirhams as previously agreed.
Outlook for Continued Oil Trade Between Russia and India
Despite the obstacles, it appears that the Sokol oil trade between Russia and India will continue, as three additional shipments of Sokol are expected, along with three new shipments – NS Antarctic, Jaguar, and Vostochny Prospect – all pointing to India as their final destination, according to Katona.
Trends in Indian Oil Imports from Russia
Throughout 2023, India’s oil imports from Russia more than doubled to 1.79 million barrels per day, while its imports from its second-largest supplier, Iraq, fell by 11 percent to 908,000 barrels per day, according to Kpler data.
Conclusion
As one of the world’s largest oil importers, India relies heavily on crude oil imports from Russia. With increasing payment-related issues, the Indian economy may face challenges in securing its future oil needs. However, the trade between Russia and India in Sokol oil is expected to continue, despite the current obstacles.
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