Imports plunged 40%! India begins to lose interest in Russian oil?

Since the Russian-Ukrainian conflict, India has begun to buy Russian oil in large quantities, but now there are signs that India seems to be unable to buy it
.

According to India's energy import data in August, due to the increase in Saudi exports and the decrease in Russian exports, Saudi Arabia has re-replaced Russia as India's second largest oil supplier after a gap of three months
.

This trend continued in September
.
According to Kepler, an energy data tracker, Russia's crude exports to India fell 40 percent to 452,000 bpd
in the first two weeks of September from August levels.

The main reason is that oil prices have retreated from the high point and Russia can give limited discounts, which has led to India's interest beginning to weaken
.
At the same time, Western countries continue to exert pressure
on India's cooperation with Russia.

Liu Zongyi, secretary general of the China and South Asia Research Center of the Shanghai Institute of International Studies, told the first financial reporter that the purchase of oil from Russia is in line with India's "multi-party balance" strategy, although India is indeed deepening its relations with the United States, but economic cooperation with Russia is more conducive to India's economic independence
.

Imports from Russia decreased

According to Indian media, citing people familiar with the matter, India has bought a large amount of Russian oil at a discounted price since the beginning of the Russian-Ukrainian conflict in February this year, which is expected to save India about 350 billion rupees (about 30.
7 billion yuan).

India is very sensitive to oil prices because 83% of its oil demand is import-dependent, and changes in oil prices will have a significant impact on
its domestic market.
The import of discounted crude oil from Russia has mitigated the further rise of the domestic consumer price index to a certain extent, which is conducive to the economic recovery
after the epidemic.

However, after more than half a year of "explosive sales", there are signs that India has begun to close
.
Taking August data as an example, India's crude imports from Saudi Arabia in August rose 4.
8% month-on-month to 864,000 bpd, while crude imports from Russia fell 2.
4% to 856,000 bpd
.

Since July, India's imports of Russian oil have begun to show weakness due to the reduction
of discounts that Russia can give.
Although the exact price of Russian oil sold to India is not known, multiple data show that the discount on Russian Urals crude has shrunk to about
$20 per barrel.

Ehsan ul Haq, an analyst at refinitiv, a research firm for financial market data, said oil suppliers in the Gulf countries also lowered official prices for October shipments, further dampening the attractiveness
of Russian oil.
He added that it takes about a month for oil to be shipped from Russia to India, while shipments from the Middle East usually take
only a week.

As a result, oil from the Gulf region regained its advantage
.
According to an Indian industry source, combined with transportation costs, the landed cost of some Russian oil is even $5 to $
7 higher than that of Gulf oil.

At the same time, Russia's seaborne oil exports fell to their lowest level since September 2021 in the first two weeks of September, which also supports the weakening
attractiveness of Russian oil for Asian customers.
In the first two weeks of September, Russia's seaborne oil exports were 3.
03 million b/d, down about 314,000 bpd from the August level and lower than before the Russian-Ukrainian conflict
, according to Kepler.

The West continues to exert pressure

Since India began to "pick up" Russian crude oil in February this year, Western countries have not stopped putting pressure
on India.
But now, the pressure on the West has not stopped because India has reduced its purchases
.

According to US media reports, an official of the US State Department claimed on the 20th that the United States is conducting "deep" discussions with India to persuade India to reconsider its military and energy cooperation
with Russia.
The move is a further attempt by the United States to isolate Russia
on the international stage.

However, India has always insisted that its oil procurement will be determined entirely by energy security needs
.
India's finance minister, Nirmala Sitharaman, said at a seminar a few days ago that oil imports from Russia are part of the Indian government's inflation management strategy, and other countries are taking similar measures
.

A few days ago, Western countries also encouraged India to join the "Russian Oil Limit Alliance"
of the Group of Seven (G7).
India's foreign secretary, Vinay Kwatra, said that India is not a member of the G7 and that the purchase of Russian oil to meet energy security needs is only a market behavior based on national interests, not "government procurement from the government"
.

Indian observers also argue that the purchase of Russian oil is mostly the move of refiners rather than the Indian government, and that Russia's low price of oil has brought many benefits to the Indian economy, helping India reduce the cost of goods, reduce the demand for dollars, and the government can invest more resources in
infrastructure construction and social welfare.