India-Russia Relation / There is a huge drop of 55% in India's crude oil imports from Russia, know the reason?

India-Russia Relation: India's crude oil imports from Russia have declined sharply in recent months. According to a new report by the Center for Research on Energy and Clean Air (CREA), India's Russian crude oil imports in November fell to the lowest level since June 2022. According to the report, this import registered a massive decline of 55% in November.

Despite the decline, however, Russia remains the largest supplier of crude oil to India. Since the start of the Russia-Ukraine war in February 2022, India had increased its crude oil purchases from Russia, which was less than one percent earlier and reached 40%.

Iraq and Saudi Arabia rank after Russia

Iraq and Saudi Arabia are ranked after Russia in terms of crude oil supply to India. The CREA report said that Russia sells 47% of its total crude oil exports to China. It is followed by India (37%), the European Union (6%), and Turkey (6%).

The discount offered on Russia's Ural grade crude oil in November compared to Brent crude oil increased by 17% on a month-on-month basis, averaging US$6.01 per barrel. However, the discount on ESPO grade declined by 15%, averaging US$3.88 per barrel. At the same time, the discount on Sokol blend decreased by 2% to US$6.65 per barrel.

India's contribution 17%

India mainly buys ESPO and Sokol grade crude oil from Russia. Apart from crude oil, India has also imported coal from Russia, although its quantity is relatively less.

According to CREA, China bought 46% of Russia's total coal exports from December 2022 to November 2024. It was followed by India (17%), Turkmenistan (11%), South Korea (10%), and Taiwan (5%) in the top five buyers.

India ranks third in fossil fuels

Combined with all types of fossil fuels, India moved to third place in the list of largest buyers of Russian fossil fuels in November. India contributed 17% of Russia's monthly revenue from the top five importing countries during this period.

Reasons for decline in Russian imports

The main reason for the decline in Russian crude oil imports can be attributed to price fluctuations and supply chain restructuring in the international market. Apart from this, reduction in discounts on grades offered by Russia is also affecting India's imports.

Conclusion

After the Russia-Ukraine war, energy trade between India and Russia increased significantly. However, a sharp decline in Russian crude oil imports in recent months has indicated that India is focusing on diversifying its energy sources. Despite this, Russia still remains an important source of energy supply for India.

Going forward, India's import policy will depend on the kind of balance Russia maintains in the price and supply of its energy resources in the global market.