India starts to gag on its Russian oil binge as refiners reach limits of what they can process

Russian oil accounted for almost half of all India’s imports last month – a staggering leap from less than 2 per cent before the invasion of Ukraine

The question now is whether the buying spree can continue as discounts narrow, pressures mount on Moscow and Indian refiners struggle to keep pace

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A crude oil refinery in Kochi, India’s Kerala state. Industry insiders say refinery configurations are the biggest limiting factor on India taking in more Russian oil. Photo: AP

Published: 12:32pm, 28 Jun 2023

From an island fort outside the heart of historic Mumbai, visitors can spot giant oil tankers unloading their cargoes at two refineries on the city’s southeastern coast.

Up until a year ago, those ships would almost certainly have been hauling crude from one of a dozen mainstay suppliers – the Middle East, the United States and West Africa. Today, the oil is more likely to be from Russia.

Moscow accounted for 46 per cent of India’s oil imports last month, according to data from analytics firm Kpler, a staggering leap from less than 2 per cent before the invasion of Ukraine.

In absolute terms, May marked a high. Granted, China has also taken far more Russian crude over the past year, with imports hitting record highs, but it is India, a strategic US partner, that has stepped out of the wings to prop up the Russian economy.

An attendant helps an autorickshaw driver fill up at a petrol station in Ahmedabad, India, this month. The average cost of Russian crude delivered to Indian shores was US$68.21 a barrel in April. Photo: Bloomberg

The question today is whether that purchasing spree can keep going, as discounts narrow for India but financial pressure on the Kremlin increases, with funds needed more urgently than ever to quash domestic threats to President Vladimir Putin’s rule.

India starts to gag on its Russian oil binge as refiners reach limits of what they can process

Russian oil accounted for almost half of all India’s imports last month – a staggering leap from less than 2 per cent before the invasion of Ukraine The question now is whether the buying spree can continue as discounts narrow, pressures mount on Moscow and Indian refiners struggle to keep pace