Despite Rising Demands from China, Here’s Why Russia Will Still Favour Indian Market for Oil Exports

Last Updated: March 01, 2023, 15:03 IST

India’s oil imports from Russia reached a record high after Ukraine war. (Photo: Reuters File)

The Western sanctions on Russian oil have benefited India hugely as it saved an estimated $3.6 billion in less than a year by ramping up oil imports

Russia will keep selling as much oil as it can to India despite the rebound in Chinese demand, a report has said.

India, which purchased almost no Russian oil a year ago, has become a crucial market after the US and EU imposed sanctions on Moscow amid the Ukraine war.

A Bloomberg report quoting Kpler said New Delhi imported around 1.85 million barrels a day from Russia in February, close to its potential maximum of about 2 million barrels a day.

Though China can buy “literally the entire Russian oil exports” after abandoning its Covid-zero policies, Russia will stick to Indian market since it is lucrative and gives it a greater control, the report quoted Viktor Katona, lead crude analyst at Kpler as saying.

In February, Russia exported 2.3 million barrels crude a day to China. Beijing’s demand for oil is set to increase by 900,000 barrels a day this year as the country has done away with Covid rules.

The Western sanctions on Russian oil have benefited India hugely. In less than a year, India has saved an estimated $3.6 billion by ramping up Russian oil imports, a report in Quartz said.

New Delhi has bought Russian oil below the $60-a-barrel cap imposed by the West. It has played a significant role in keeping Russia’s oil balance sheet afloat.

China may want to buy more Russian oil this year but Beijing also has the capacity to do their own shopping. The report further said that it would deprive Moscow of income from the “parallel gray fleet” of tankers it has established to is deliver crude to India.

Moreover, the journey to India is shorter as it takes a tanker 35 days on average to get to India from Russia’s western ports. On the other hand, it takes 40 to 45 days to China.

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