Indian refiners have been sourcing cheap crude oil from Russia, a development that has impacted cargoes from the US, which fell 48 per cent Y-o-Y in 2023, the US Energy Information Administration (EIA) said.

Even as the North American country exported on an average 4.1 million barrels per day (mb/d) of crude oil last calendar year, sourcing by the world’s third largest crude oil importer slipped to an average 148,000 barrels per day (b/d) during the same period.

“In contrast to increasing US crude oil exports to the Netherlands and China, US crude oil exports to India fell 47 per cent (146,000 b/d). India increased imports from Russia following sanctions that limited the price Russia could charge for crude oil exported using the services of sanctioning countries; importers in India have been favouring the lower-cost crude oil from Russia over crude oil from the US,” the US EIA said.

Average exports

According to data from Vortexa Analytics, India’s average annual crude oil imports from Russia doubled from 0.9 mb/d in 2022 to 1.8 mb/d in 2023, it added.

As per Kpler, Indian cargoes from Russia have found a new equilibrium at 1.5-1.6 mb/d, in 2024 so far.

The top destinations for US crude oil exports since 2018 have been Europe as well as Asia and Oceania. Europe became the top export destination in 2023 following the Russia-Ukraine war and the inclusion of West Texas Intermediate (WTI) crude oil in Dated Brent.

In 2023, the US crude oil exports to Europe averaged 1.8 mb/d, slightly more than U.S. exports to Asia and Oceania of 1.7 mb/d.

The Netherlands emerged the top destination for US crude oil averaging at 652,000 b/d, more than double 2022 volumes. It was followed by China, which averaged at 452,000 b/d last year.

According to data from Vortexa, India imported around 144,000 b/d of crude oil from the US in February 2024. India also imported more than 210,000 b/d crude oil from the US during September and October last year, following which the cargoes dwindled hitting the lowest of 35,200 b/d in January 2024.

Last year, June, September and October were the only months when cargoes from the US surpassed 210,000 b/d.

India began importing crude oil from the US in the second half of the 2017 calendar year.

As per Commerce Ministry data, India imported $4.9 billion worth of crude oil from the US in FY20, making it the country’s fourth top supplier. In FY21 and FY22, the US was the fourth top crude oil supplier with cargoes worth $5.40 billion and $11.32 billion, respectively. However, the US slipped to the fifth spot in FY23 with crude exports of $10.18 billion.