Russian crude's share rises 5% in a shrunk August basket

New Delhi: Imports from Russia rose in August even as shipments from Iraq, Saudi Arabia and the US declined, pulling India's total crude imports to a 10-month low amid weaker domestic demand, according to shipping data.

Russia supplied 1.67 million barrels per day (mbd) in August, up 5.6% from July, even as India's overall crude imports fell 4% to 4.5 mbd, according to Kpler, a global real-time data and analytics provider. Russia's share in India's imported crude basket climbed to 37% from 33% in July, against the backdrop of the India-US tussle over Russian oil. Since August imports were booked about two months earlier, they are unlikely to reflect any tariff-related considerations, industry executives said.

"(Overall) crude imports into India dipped in August due to maintenance at (BPCL's) Bina and (Indian Oil's) Barauni refineries," said Sumit Ritolia, lead research analyst, refining and modeling at Kpler.

Imports from Iraq, the second-largest supplier, dropped 18% month-on-month to 743,000 barrels per day (bpd) in August, the lowest in more than a year. Supplies from Saudi Arabia, the third-largest supplier, fell 8% to 644,000 bpd, while imports from the US tumbled 37% to 230,000 bpd.

The top gainer was the UAE, the fourth-largest supplier, which shipped 622,000 bpd, up 39% from July. Supplies from Colombia doubled to 127,000 bpd and from Angola rose 57% to 91,000 bpd.

This reshaped market shares, with the UAE's share climbing to 14%, nearly equalling Saudi Arabia's. Iraq's share slipped to 16.5% from 19%, while the US share dropped to 5% from 8%. Colombia's share expanded to nearly 3% and Angola's to 2%.

Discounts continue to drive India's tilt towards Russian oil. Even though they have narrowed sharply since the first year of the Ukraine war, Indian refiners still find it profitable to process a large share of Russian crude, boosting their margins.

The drop in supplies from other sources also reflects lower processing requirements as domestic demand weakens. Overall refined product consumption fell 4.2% year-on-year in July and 0.5% in the April-July period. In August, growth in petrol, diesel and cooking gas sales slowed sharply, while jet fuel consumption declined.

The US has been piling pressure on India to halt its purchase of Russian oil, accusing New Delhi of financing Moscow's war in Ukraine by buying cheap Russian crude and reselling it to the West after processing.