On Tuesday (January 27), India's Petroleum Minister Hardeep Puri stated in an interview that as India continues to diversify its supply sources, the country's crude oil imports from Russia are decreasing, with the related flow showing a "downward trend."
Key Figures: Decline from 1.8 million barrels/day to 1.3 million barrels/day
Puri's latest figures indicate that the volume of crude oil transported from Russia has dropped from an average of around 1.8 million barrels per day last year to around 1.3 million barrels per day. He emphasized that this change is driven by commercial conditions.
As the world's third-largest crude oil buyer, changes in India's purchasing pace and structure are often seen by the market as significant signals of global crude oil supply and demand and trade flows.
Behind the Decline: Diversified Procurement and External Pressure
Puri also stated that the Indian government has not issued directives to companies on whether to buy Russian oil, allowing companies to make their own decisions; currently, India can purchase crude oil from 41 countries.
Recently, the United States has been pressuring India's purchase of Russian oil at the trade level, with signals of "additional tariffs possibly adjusting as Russian oil imports decline," making the market more sensitive to India's subsequent import structure.
Market Perspective: Discounts Cushion the Fall, Alternative Sources Step In
Despite the decline in import volume, the flow of Russian oil to India is still considered resilient, primarily due to attractive price discounts. Reuters cited market sources as saying that the discount on Russian Urals crude for India at one point reached its widest level since 2022.
Meanwhile, Indian refineries are also accelerating their search for alternative sources. Reuters reported that India’s largest oil refiner, Indian Oil Corporation (IOC), plans to increase its procurement of Brazilian crude and expand to new sources including Colombia and Ecuador.
Future Focus: Will Import Structure Continue to Shift, Changes in OPEC Share
In the short term, the market will continue to track the arrival of Russian oil in India and changes in discounts, as well as whether the share of OPEC and other oil-producing countries in India's import structure will further increase amid tariff and sanction expectations causing disruptions. Reuters previously cited trade data indicating that India's Russian oil imports fell to a two-year low last December, leading to an increase in OPEC's share.
