India and Saudi Arabia Major Buyers of Russian Oil: Report
Western sanctions pushed Russian oil and gas producers to look elsewhere for customers. India and Saudi Arabia emerged as major buyers. Russia has been offering discounts and New Delhi scooped it all up.
Data from commodity intelligence firm Kpler highlights that Russia has become India’s leading source of crude oil, accounting for about 40 percent of India’s crude imports. Viktor Katona Kpler’s lead crude analyst, said an unprecedented feat in recent history – 2.2 Million barrels per day in June. This is the highest volume that India’s imports of Russian oil can go.
Katona believes 2.2 Million b/d will be the peak this year. “We believe India’s imports of Russian crude will see a slight downward correction to two million barrels per day. That will be the sustainable level of buying.” Janiv Shah, a senior analyst at Rystad Energy, says India may have reached its limit. “The volume of crude oil consumed and processed by India’s refineries has now hit a seasonal peak and would only trend downwards from here. Katona added that some of India’s refineries, for the first time this year, will be undergoing maintenance which was just not the case in January to May 2023 when there were no turnarounds at all. Kpler noted that fuel oil imports typically peak around this time of the year because of the high demand from power generation during peak cooling months.
As for the Middle East, fuel oil exports grew to 1.4 million bpd in June, up 340,000 bpd month-on-month and a record high for the month of June. The analytics firms said demand for summer fuel was driven by Saudi Arabia’s recent crude production cut of 1 million bpd. “Saudi Arabia has been one of the major buyers of Russian fuel oil in recent months, registering a record amount in June.
The Kingdom is set to buy more sizable volumes of Russian oil as its going to burn more fuel oil domestically for power generation. It makes sense to import cheap fuel oil from Russia. Crude imports from the Middle East region, in June, fell by 21.7 percent to 8.68 kilo tons in June compared to the start of the year.