India Diversifies Energy Basket as Russian Crude Imports Climb and Gulf Supplies Stabilise

Crude oil procurement from Russia and UAE by India was done before any disruption in the Strait of Hormuz. According to analysts, Indian refineries increased their crude oil purchases from Russia and UAE to ensure supply and protect themselves from the West Asia crisis. Statistics provided by shipping and commodities company Kpler revealed that between January 1 and June 19, India imported about 2.66 million barrels per day (bpd) of crude oil from Russia compared to 1.91 million bpd in May. Russia remains the major source of crude oil in India.

Imports of crude oil from the UAE stood at 636,000 bpd in June slightly lower than the record 644,000 bpd recorded in May. During this period, Venezuela emerged as India's fourth largest oil supplier providing 209,000 bpd while India imports 384,000 bpd from Saudi Arabia. Imports of crude oil from the US dropped significantly to 91,000 bpd in June from 252,000 bpd in May.

Experts indicate that oil from Russia, which is available at discounted prices, is preferred for Indian refiners. Simultaneously, increased imports of oil from the UAE help to mitigate the risk of uncertainty of supplies via the Strait of Hormuz. As the third largest energy importer in the world, India depends on the Middle East for imports of crude oil, LNG and LPG. Energy supplies were disrupted following the closure of the Strait of Hormuz amidst the conflict involving Iran. This waterway handles approximately 20 percent of global oil consumption and serves as a vital export route for nations such as Saudi Arabia, Iraq, Kuwait, the UAE, and Qatar. However, oil supplies via this route have gradually resumed since the end of last week following a ceasefire agreement between the US and Iran. Nevertheless, the situation remains precarious as Iran has accused Israel of violating the ceasefire.