Crude oil flows from Russia erodes Middle East, US share in India market

India’s insatiable appetite for discounted Russian oil is eroding the dominance of traditional suppliers from the Middle East to Africa and the US in one of the world’s most lucrative markets.

The share of the Eurasian region, which includes Russia, in India’s overall crude oil imports reached a record 18.8% during April-June from 3.4% in the preceding 12 months, according to the oil ministry’s Petroleum Planning & Analysis Cell. The other regular supplier from the region is Azerbaijan, which accounts for a small fraction.

Oil imports from the Middle East, which is India’s biggest sourcing region, slipped to 61.9% from 63.9% in the previous one year, while those from the Organization of the Petroleum Exporting Countries, or OPEC, decreased to 64.8% of total imports during April-June, compared with 69.7% a year earlier.

India has been diversifying its oil sourcing to reduce dependence on the Middle East and has stepped up imports from the US after it started exports in late 2015. But purchases from North America, which includes US, Mexico and Canada, halved to 6.8% from the previous 12 months, while Africa dropped to 9.2% from 13.6%, the data showed.

Russian oil has been muscling into the Indian and Chinese markets and eating into the share of Iraq and Saudi Arabia in the world’s biggest oil consuming region. Refiners in India have been gorging on cheap Russian barrels more than they ever did before the invasion of Ukraine.