Oil Trade Realignment: India Narrows Gap Between Russia and Saudi Arabia

India is poised to import the highest amount of crude oil from Saudi Arabia this month in more than six years. This is a result of continued US pressure on India to cut down on crude oil imports from Russia. According to Sumit Ritolia, a principal research analyst for Kpler, oil imports from Saudi Arabia to India are poised to rise to 1 million to 1.1 million barrels a day. This is the highest level of imports since November 2019. This is a result of the narrowing gap with Russia, as mentioned above. This gap has widened considerably due to increased imports of crude oil from Russia following the invasion of Ukraine.

US pressure on India intensified earlier this month when US President Donald Trump stated that India had agreed to stop purchasing Russian oil as part of a trade deal. However, India has not publicly responded to this claim. If oil flows reach 1.2 million barrels per day, Russia will remain India's largest supplier this month, but shipments are expected to decline further.

After the 2022 invasion of Ukraine, India emerged as a major buyer of Russian oil, as OPEC and other producing countries forced Russia to offer steep discounts. This was because most other buyers were shying away from Moscow-related energy. India then imported 2 million barrels of Russian oil per day.

Kepler said that imports from Russia could further decline next month, to between 8 and 1 million barrels per day. Import volumes are expected to decline further due to a maintenance shutdown in April and May at a refinery operated by Nayara Energy, which relies heavily on Russian crude oil, following EU sanctions.

For Russia, losing its share in India weakens a key market for its oil, displaced from Europe after the Ukraine war. For Saudi Arabia, regaining the top spot would restore strategic influence in one of the fastest-growing oil markets.