New Delhi India’s traditional crude oil suppliers, the Middle East, lost almost 1.21 million barrels of exports per day during FY23.

According to data provided by energy intelligence firm Vortexa, the Middle East accounted for a 69 per cent share of India’s total crude oil imports in April 2022, which declined to 44 per cent during April 2023, a steep fall of 25 per cent.

The steep decline in the share of Middle eastern countries—Iraq, Saudi Arabia, Kuwait, the UAE, Oman—is on account of Indian refiners turning towards Russia for discounted supplies.

Read: India buying Russian crude, laundering refined products into Europe: CREA report

Analysts say that Russia is giving stiff competition to India’s traditional suppliers to become the biggest contributor to the world’s third-largest crude oil consumer and the fourth-largest refiner.

When asked whether Russia has surpassed the Middle East bloc as India’s top supplier, Serena Huang, Head of APAC Analysis at Vortexa told businessline “As of April 2023, India’s crude imports from the Middle East is still higher than Russia, but the gap has been narrowing since last April.”

She pointed out that the Middle East’s share in India’s cumulative crude oil imports during March 2022 stood at 67 per cent, which has declined to 44 per cent as of last month.

Market share

On competition from the Middle East to claw back their share, Huang explained “Saudi Arabia and Iraq have term contracts with Indian refiners helping secure their market share. Our preliminary data suggests that Saudi Arabia and Iraq’s crude loadings to India are up over 450,000 barrels per day month-on-month in April, which should see a rebound in their market share next month.”

She added that both the countries could turn to other Asian countries or Europe, should their volumes displaced from India.

According to the Commerce Ministry data, during FY23, the Middle East accounted for 58.16 per cent of India’s total crude oil import bill of $158.3 billion in value terms. India paid $92.07 billion for the commodity to the Arab countries in the last fiscal. Its share in FY22 and FY21 stood at 64.7 per cent and 58.25 per cent, respectively.

In contrast, Russia, which accounted for just 1.5 per cent share, or less than $1 billion in FY21, has seen its clout grow in the next two financial years. During FY22, the erstwhile Soviet Union’s share rose to 2 per cent, with an income of $2.47 billion out of the total crude oil import payments of $120.7 billion.

In FY23, Indian refiners paid Russian oil companies a whopping $31.02 billion with the country accounting for 19.6 per cent of the total crude oil import bill.

As per Vortexa, India remained the largest buyer of seaborne Russian crude oil in April 2023 for the fifth consecutive month with in-bound shipments growing by a little over 1 per cent M-o-M to 1.63 mb/d.