The effect of the ongoing crisis in the Middle East and the resulting supply shortage has been that Russia’s share in India’s oil imports has once again increased. Russia has become India’s top oil supplier but this time the difference is that India is not getting Russian oil as cheap as before, but now it has to buy it at a premium i.e. higher price.
According to the latest data from the Ministry of Commerce and Industry, India’s oil imports will decline in March 2026 after the start of the US-Iran war. Russia The share was 33.3% i.e. about one-third.
Meanwhile from Gulf countries Oil There was a sharp decline in imports because the Strait of Hormuz was closed. In terms of quantity, India imported about 2 million barrels per day of crude oil from Russia during March. However, there has been a decline in Russian oil purchases in the last month i.e. April due to refinery maintenance in India and Ukraine’s attacks on Russian oil bases.
Discount on Russian oil ends, extra price has to be paid on top
When the Russia-Ukraine war started in February 2022, Russia offered oil at a huge discount to its allies like India and Russia in view of the sanctions on its oil. At that time India used to buy hardly any oil from Russia. Due to the war, oil prices were rising significantly, due to which India started buying oil from Russia and within no time Russia became India’s top oil supplier.
Indian refineries started getting Russian crude oil 8-10 dollars cheaper per barrel than global prices. But now the situation is different. The supply from the Middle East has been badly affected. In view of rising oil prices, America has given a temporary exemption on the purchase of Russian oil till May 16. The demand for Russian oil has increased significantly. Amidst the demand, Russia has not only ended the discount, but has also increased the prices of its oil significantly.
In some cases, Indian refineries are paying a premium of $4-5 per barrel over the benchmark price for particular Russian grades. This shift from discount to premium reflects the tightening of global supply and increasing competition among buyers.
Additionally, logistics and shipping costs have also increased as long routes, insurance issues and restrictions have made fares more expensive.
Despite this, Indian refineries are buying Russian oil even at higher prices, because due to the war it is more important to ensure oil supply.
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