India Surpasses China as Largest Buyer of Russian Oil

Tags: Economics/Business

In July, India became the largest buyer of Russian oil, surpassing China, as reported by Reuters on August 22.

An Overview of the News

• India imported 2.07 million barrels per day (bpd) of Russian crude, while China imported 1.76 million bpd.

• This marked a significant shift, with India importing 12% more Russian crude than last year, and China reducing its imports by 7.4%.

Factors Influencing the Shift

• China's decline in Russian oil imports is attributed to weakening processing margins among refineries and low domestic demand for fuel.

• Both India and China have taken advantage of discounted Russian oil following Western sanctions and a G7-imposed price cap of $60 per barrel due to Russia's invasion of Ukraine.

Implications for Russia and India

• Russia’s oil and gas revenues have surged, indicating Moscow's success in circumventing Western sanctions.

• An unnamed industry insider from India suggested that India’s demand for Russian oil is expected to increase, provided there are no further sanctions.

• In July, Russian crude accounted for a record 44% of India’s total oil imports.