India remained the largest buyer of seaborne Russian crude oil in April 2023 for the fifth consecutive month, with inbound shipments growing by a little over 1 per cent month-on-month to 1.63 million barrels per day (mb/d).
The world’s third-largest energy resources guzzler, imported around 1.61 mb/d in March this year, data shared by energy intelligence firm Vortexa with businessline showed.
India became Russia’s largest buyer of seaborne crude in December last year, with imports of around 1.22 mb/d. Since December, inbound shipments have been consistently over 1.22 mb/d.
Private refiners such as Reliance Industries (RIL) and Russian state-run oil giant Rosneft-backed Nayara Energy accounted for almost 46 per cent of the total imports from Russia, according to Vortexa.
They imported 524,000 barrels per day (b/d) of Ural grade, followed by 123,000 b/d of ESPO; Varandey (67,000 b/d); and Arco (35,000 b/d) in April.
Crude price rally softens
Analysts said that as global crude oil prices cool down again after the rally witnessed earlier in April due to the OPEC+ production cuts, it will help Indian refiners protect their margins.
Besides, it will also bring down instances of prices breaching the G7 cap of $60 per barrel. However, at present, only some of the supplies, largely of lighter grades such as Sokol, have breached the cap.
Oil marketing company (OMC) sources said it seems the April 2 production cut has not been able to support international crude oil price rally for long. After a brief spike, which saw prices hit $87 per barrel around mid-April, the rates are now around $76-78 a barrel. This is being attributed to concerns over decelerating global industrial growth and rising interest rates.
The development also reflects in the Indian basket’s crude oil prices for free on board (FOB). They stood at around $77.84 per barrel on March 29 appreciating to $78.30 on March 31. After the output cut announcement, the basket price rose to $85.11 a barrel on April 5. However, as on April 26, the Indian basket is at 80.71. In April so far, the prices have averaged at $84.3 a barrel against $78.54 in March 2023.
However, OMC officials indicated that a more concrete analysis would be possible after analysing trading in the next 2-3 months as a better view is required to judge the impact of these production cuts (around 1.16 mb/d till end of 2023).
Earlier this month, ICRA in a report said that sea-borne exports from Russia witnessed a significant decline in the first week of April 2023 to around 2.89 m/bd from around 5 m/bd at the end of calendar year (CY) 2021 indicating the impact of production cuts by Russia. This is likely to keep the supplies tight in the market.