India's import of cheap Russian oil scaled another record in May and is now more than the combined oil bought from Saudi Arabia, Iraq, UAE and the US, industry data showed.
India took 1.96 million barrels a day from Russia in May, 15 per cent more than the previous high in April, according to data from energy cargo tracker Vortexa.
Russia now makes up for nearly 42 per cent of all crude oil India imported in May. This is the highest share for an individual country in recent years.
The rise in Russian shares came at the cost of traditional suppliers in the Middle East. Shipments from Saudi Arabia slipped to 560,000 tonnes, the lowest since February 2021, according to figures from the shipping analytics company.
OPEC's share in India's oil imports decline
Oil producers cartel OPEC's share in India's oil imports fell to an all-time low of 39 per cent in May.
Organisation of the Petroleum Exporting Countries (OPEC), mainly in the Middle East and Africa, made up for as much as 90 per cent of all crude oil India imported at one point of time, but this has been sliding since Russian oil became available at a discount in the aftermath of Moscow's invasion of Ukraine in February last year.
For the eighth straight month, Russia continued to be the single largest supplier of crude oil, making up for 42 per cent of all oil India imported.
Crude oil is converted into petrol and diesel at refineries.
The imports from Russia are now more than the combined purchases from Iraq and Saudi Arabia —India's biggest suppliers in the last decade — as well as UAE and the US.
Iraq supplied 0.83 million barrels per day (bpd) oil in May, while UAE shipped 203,000 bpd. As much as 138,000 bpd was sourced from the US, the data showed.
From a market share of less than 1 per cent in India's import basket before the start of the Russia-Ukraine conflict in February 2022, Russia's share of India's imports rose to 1.96 million barrels per day in May, taking a 42 per cent share.
OPEC supplied 1.8 million bpd out of 4.7 million bpd oil India imported in May. This was down from 2.1 million bpd imported in April, according to Vortexa.
Indian refiners in the past rarely bought Russian oil due to high freight costs but now they are snapping up plentiful Russian cargo available at a discount to other grades, as some Western nations rejected it because of Moscow's invasion of Ukraine.
The purchases from Russia in May were more than double of 0.83 million bpd of oil bought from Iraq, which had been India's top oil supplier since 2017-18. Saudi Arabia has been pushed down to No.3 spot.
"India's imports of Russian crude continue to test new highs, reaching almost 2 million bpd in May. Refiners have tested and gained confidence in processing Russian crude, and their voracious appetite for "Russian crude is likely to grow as much as they have room to back off spot crude purchases," said Vortexa's head of Asia-Pacific analysis, Serena Huang.
The average cost of Russian crude including freight costs landing on Indian shores in April was $68.21 a barrel - the lowest level since the Ukraine war. The average cost of Saudi Arabian crude sent to India in April was $86.96 a barrel, while Iraqi oil was priced at $77.77 a barrel.
May import price has not yet been released.
Russia is selling record amounts of crude oil to India to plug the gap in its energy exports after the European Union banned imports in December.
In December, the EU banned Russian seaborne oil and imposed a $60-per-barrel price cap, which prevents other countries from using EU shipping and insurance services, unless oil is sold below the cap.
Industry officials said Indian refiners are using the UAE's dirham to pay for oil that is imported at a price lower than $60.
According to Vortexa, India imported just 68,600 bpd of oil from Russia in March 2022.