India's Russian Oil Imports Remain Strong Despite Western Sanctions

Economic Times
Economic Times
4h ago
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India's Russian oil imports are rising in December despite sanctions, sustained by discounted pricing and non-sanctioned suppliers.
India's Russian Oil Imports Remain Strong Despite Western Sanctions
A What happened
Trade and refining sources report that India's Russian crude oil imports will exceed one million barrels per day in December, surpassing prior expectations of a decline due to Western sanctions on Russia's energy sector. Indian refiners are buying from non-sanctioned Russian entities offering deep discounts, while Russia uses domestic market swaps to keep export flows intact. State refiners like Indian Oil Corp and Bharat Petroleum are increasing their purchases, although some private refiners are pausing Russian buys. This development highlights the resilience of India-Russia energy cooperation under geopolitical strain, complicating Western efforts to restrict Russian oil revenues and reshaping import patterns for the world's third-largest crude importer.
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Key insights

  • 1

    Sanctions Evasion Through Domestic Swaps: Russia uses domestic market swaps to route sanctioned crude to local refineries while exporting non-sanctioned volumes to India, preserving export flows under sanctions.

  • 2

    Price Discounts Bolster Demand: Deep discounts on Russian crude, up to $6 per barrel below Brent, attract Indian refiners despite geopolitical risks and sanction pressures.

  • 3

    Shift in Global Energy Alliances: India's growing imports position it as Russia's largest seaborne buyer, reflecting shifting energy alliances influenced by geopolitical sanctions and economic interests.

Takeaways

India's increasing Russian oil imports underline the complexity of sanction enforcement and signal enduring India-Russia energy ties amid global geopolitical tensions.

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