India buys €2.5B worth of Russian oil in October
What's the story
India, the world's second-largest importer of Russian oil, spent €2.5 billion on crude oil imports from Moscow in October. The amount remained unchanged from September's expenditure, according to a report by the Centre for Research on Energy and Clean Air (CREA). China continued to be the largest buyer of Russian fossil fuels during this period.
Sanction impact
US sanctions on Russian oil producers
On October 22, the US imposed sanctions on Rosneft and Lukoil, two of Russia's largest oil producers. The move was aimed at cutting off the Kremlin's funding for its war in Ukraine. The sanctions have led companies such as Reliance Industries, HPCL-Mittal Energy Ltd., and Mangalore Refinery and Petrochemicals Ltd to suspend imports for now.
Import increase
India's oil imports from Russia surge post-Ukraine invasion
India's oil imports from Russia have surged since the latter's invasion of Ukraine in February 2022. This is mainly due to Western sanctions and reduced European demand, which have made Russian oil available at steep discounts. As a result, India's share of Russian crude in its total imports skyrocketed from under 1% to nearly 40% in no time.
Import growth
October sees 11% increase in Russian crude imports
In October, India's Russian crude imports saw an 11% month-on-month growth. Private refiners accounted for over two-thirds of these imports, while state-owned refineries almost doubled their Russian volumes month-on-month during this period. The Vadinar refinery (owned by Rosneft) in Gujarat, which is now sanctioned by the EU and UK, ramped up production to 90% in October.
Price advantage
Russian oil discount attracts India
The sanctions on Russian oil exports by the US, EU, and other Western nations have significantly affected Russia's ability to sell oil to European markets. To find new buyers, Russia started offering crude oil at heavily discounted prices. The price discount on Russian oil was sometimes as much as $18-20 per barrel lower than the market price of other oils.