In July, India surpassed China as the largest importer of Russian oil as the Chinese refiners reduced purchases due to lower profit margins from fuel production.

Russian crude oil made up an unprecedented 44% of total imports to India last month, amounting to 2.07 million barrels per day (bpd), which is 4.2% more than in June and 12% more than in the same month last year.

India’s July oil imports from Russia of 2.07 million bpd exceeded China’s 1.76 million bpd, based on customs data.

Indian refiners have been increasing their Russian oil purchases, taking advantage of discounted prices due to Western sanctions on Moscow following Russia’s invasion of Ukraine.

A source noted that India’s demand for Russian oil will continue to rise unless sanctions are tightened further.

Since Russia’s war against Ukraine began in February 2022, India’s trade with Russia, primarily involving oil and fertiliser imports, has increased, helping to stabilise global prices and control inflation.

India’s increasing purchases are shifting the flow of Russian ESPO Blend crude from China to South Asia, with ESPO imports to India rising to 188,000 bpd in July.

Northeastern China, usually the largest ESPO buyer due to its proximity, has reduced its demand because of weak fuel consumption.

Iraq remained India’s second-largest oil supplier in July, followed by Saudi Arabia and the United Arab Emirates.

India’s crude purchases from the Middle East increased by 4% in July, raising the region’s share of India’s total imports to 40% from 38% in June.

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