Indian Refiners Expand US Crude Imports Amid Tightened Russian Sanctions

In an evolving landscape of global oil trade, India is set to boost its U.S. crude oil imports next month to over 250,000 barrels per day, marking the highest import rate from the U.S. in over a year. This shift, highlighted by recent ship tracking data, comes as India seeks to widen its oil procurement sources amidst intensified U.S. sanctions impacting Russian crude supplies.

India, positioned as the world’s third-largest oil importer and consumer, is strategically diversifying its supply chain. The recent clampdown by the U.S. on Moscow’s crude trade has placed India in a crucial position to reassess its oil sourcing, especially considering its role as the predominant purchaser of Russian seaborne crude following the imposition of Western sanctions.

Tracking data from Kpler reveals that approximately 7.6 million barrels, or 256,000 barrels per day, are en route to India aboard three very large crude carriers and three Suezmax vessels. These shipments, primarily directed to India’s western coast, are managed by industry giants including Reliance Industries and Vitol, as well as Equinor and Sinokor, with LSEG providing the tracking data.

In the backdrop of geopolitical tensions following Russia’s military actions in Ukraine in February 2022, India emerged as a key consumer of Russian oil. However, the landscape shifted significantly last month as the U.S. amplified its sanctions, targeting entities like the state-owned shipping company Sovcomflot and 14 crude oil tankers engaged in Russian oil logistics.

Sources close to the matter have indicated that Reliance Industries, which operates the globe’s largest refining complex, along with other Indian refiners, is opting out of purchasing Russian oil transported by Sovcomflot vessels in response to the U.S. sanctions. This strategic pivot is likely to challenge Russia’s oil export dynamics, potentially reducing its market avenues for crude distribution.