India has overtaken China as the world’s biggest importer of Russian oil as of July. The change is attributed to reduced purchases by Chinese refiners, who faced lower profit margins from fuel production.
Record Oil Imports
In July, Russian crude oil comprised a record 44% of India’s total oil imports, reaching 2.07 million barrels per day (mbpd). This represents a 4.2% increase from June and a 12% rise from the previous year. This volume exceeds China’s July imports of 1.76 mbpd from Russia, based on Chinese customs data.
Impact of Western Sanctions
Indian refiners have been capitalizing on discounted Russian oil following Western sanctions imposed in response to Russia’s invasion of Ukraine.
Future Demand and Trade Relations
An Indian refining source noted that demand for Russian oil in India is expected to rise further unless additional sanctions are introduced. Since the onset of the Ukraine conflict in February 2022, India’s trade with Russia has expanded significantly, driven by increased imports of oil and fertilizers. This trade surge has helped stabilize global oil prices and manage inflation.