On August 5, Russia surpassed OPEC+ ally, Saudi Arabia, expanding market share in one of the largest crude importers, despite rising fuel demand in India and high crude oil prices on the international market, reports media.
Russian barrels were less expensive than Saudi Arabian barrels from April through June 2022, and they supplied crude to India with a differential that widened to about $19 per barrel in May. Russia even overtook Iraq to become India’s second-largest supplier in June.
India and China have embraced Russian crude after the invasion of Ukraine caused most importers to avoid its barrels. India imports 85 per cent of its oil requirements from Russia to provide some economic comfort during high inflation and a record trade deficit.
Government statistics show that India’s import cost for oil increased to $47.5 billion in the second quarter because of increased world prices and fuel demand. In the same quarter of 2021, when prices and volumes were lower, it was $25.1 billion. Petroleum prices have fallen recently on worries about a slowing economy, relieving consumers.
Even though the difference between Russian and Saudi crude prices narrowed in June, crude oil was still around $13 cheaper and, on average, cost about $102. Coincidentally, Saudi Arabia was India’s top crude oil supplier in 2021, while Russia ranked ninth.
Through June this year, Iraq continued to be India’s top crude supplier. OPEC supplier Iraq’s crude oil was almost $9 per barrel, more expensive than Russian barrels in May, but it was cheaper in all other months. India’s imports from Russia have increased tenfold since March.