Russia supersedes Saudi Arabia to become second-biggest crude supplier to India: Report

Amid the rising fuel demand in India and high crude oil prices in global market, Russia has succeeded in beating OPEC+ ally Saudi Arabia to expand market share in one of the biggest crude importers, reported Bloomberg on 5 August.

During April through June 2022, Russian barrels were cheaper than Saudi crude and providing crude to India with discount widening to almost $19 a barrel in May. Russia even emerged as the second-biggest supplier to India in June, ranked just behind Iraq.

As most buyers shunned its barrels following the invasion of Ukraine, India and China have become willing consumers of Russian crude. To offer some economic relief amid the elevated inflation and a record trade gap, India imports 85% of its oil needs from Russia.

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According to government data, India’s crude import bill swelled to $47.5 billion in the second quarter following a surge in global prices coincided with rebounding fuel demand. It was $25.1 billion in the same period in 2021, when prices and volumes were lower. Meanwhile, the prices of crude tumbled recently on concerns over an economic slowdown and offering some respite to consumers.

“Indian refiners are going to try and get their hands on the cheapest crude possible that works with their refinery and product configurations. Russian crude fits that bill for now. The Saudis and Iraqis are not entirely losing out because they are directing more supply to Europe,” Bloomberg quoted Vanda Insights founder Vandana Hari as saying.

Despite the discount of Russian oil to Saudi crude narrowed in June, crude oil were around $13 cheaper and were priced about $102 on an average. Coincidently, Russia was the ninth largest crude oil supplier to India in 2021, while Saudi Arabia was the second-biggest.

Meanwhile, Iraq maintained to be the the biggest crude supplier to India this year too through June. In May, crude oil from the OPEC producer (Iraq) was around $9 a barrel higher than Russian barrels, however, was at a discount in all other months. Since March, India’s imports from Russia have surged tenfold.

With Bloomberg inputs. 

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