India’s imports of Russian oil fell in November with dwindling discounts

India’s imports of Russian crude fell in November to the lowest level since June 2022 but the Kremlin continues to be India’s biggest source of oil, according to the European think tank’s monthly tracker report.

India has become the second largest buyer of Russian crude oil since Moscow invaded Ukraine in February 2022, with purchases rising from less than 1 percent of all oil imports to nearly 40 percent of the country’s oil imports.

The increase was due to Russian crude oil being available at a discount to other world oil traders due to falling prices and European countries avoiding buying from Moscow.

“India’s imports of Russian crude oil fell by 55 percent in November – the lowest figure since June 2022,” said a recent Center for Research on Energy and Clean Air (CREA) report.

Russia remained India’s leading oil supplier, followed by Iraq and Saudi Arabia.” China bought 47 percent of Russian crude, followed by India (37 percent), the EU (percent six), and Turkey (six percent),” CREA said without giving exact numbers.

In November, there was a 17 percent monthly increase in the Russian Urals crude oil discount to an average of USD 6.01 per barrel compared to Brent crude oil.

The discount in the ESPO grade was cut by a whopping 15 percent and sold at an average discount of USD 3.88 per barrel while that in the Sokol blend decreased by 2 percent to $6.65 per barrel, it said.

Russia sells mainly ESPO and Sokol crude oil brands to India. Apart from crude oil, India bought small quantities of coal from Russia.

“From December 5, 2022 to the end of November 2024, China bought 46 percent of all coal exports from Russia – India (17 percent), Turkey (11 percent), South Korea (percent 10), and Taiwan (5) percent) close the list of the top five buyers,” according to CREA.

All fossil fuels combined, “India dropped to third place in the list of the largest buyers of Russian fossil fuels in November, contributing 17 percent (EUR 2.1 billion) to Russia’s monthly export earnings from its top five producers. It was and a significant 22 cent drop in Russia’s revenue from crude oil exports to India in November,” he said.

While there was an 11 percent drop in India’s total crude oil imports in November, Russian prices suffered the most, falling by 55 percent.
India imports more than 85 percent of its crude oil, which is refined into fuels such as gasoline and diesel.

In an attempt to limit the money of the Russian war machine, the Group of Seven (G7) wealthy nations, the European Union and Australia put a ban on Russian crude and introduced a total price of $60 per barrel in December 2022.

Over the next 12 months, the tariff and embargo took a toll on revenues, and forced Russia to find new markets and ways to transport its oil.

Russia has done this by offering deep discounts on its Urals range crude.

“It has been two years since the price cap was imposed. CREA estimates that during this period, the sanctions forced Russia to reduce the price of Urals by approximately 15 percent.

“Since the sanctions, Russia has lost an estimated EUR 14.6 billion in revenue from exports of Urals grade crude,” the report said.

In the second year of the sanctions, CREA estimates that the sanctions have affected the crude income of the Russian Urals by 10 percent resulting in a loss of EUR 4 billion.

This impact was most felt in the first half of 2024 when the Russian currency was hit by EUR 2.5 billion.

“The price drop has had an impact but has failed to achieve its potential. The lack of regulations and the desire to lower the price means that Russia has found a way to bypass the limit and find new markets as time goes on, especially in the second year of the sanctions,” said the newspaper.

In the first year of the sanctions Russia was losing, on average, 23 percent of the Urals’ crude export revenue every month due to the tariff and the embargo.

This figure dropped significantly to a monthly average of 9 percent in the second year of the cap. The impact has gradually decreased in 2024 – the income result in October was 63 percent lower than that of January.

“Since Russia has built a network of ‘shadow’ tankers, it can trade its oil above average to new markets in banned countries,” CREA added.