As sanctions tighten their grip, India prepares for an energy shakeup with a 12-month low in oil imports from Russia, signaling a subtle yet significant shift in the nation's strategic landscape due to various factors.
India has been one of the top importers of Russian oil especially after the war against Ukraine broke out in 2022. New Delhi despite subtle warnings from Washington and Brussels went ahead with grasping the opportunity of saving billions of dollars on the crude bill. India increased oil imports so much so that Moscow overtook Saudi Arabia and Iraq in India's oil import list.
New Delhi saved massive money from buying discounted oil from Russia, especially amidst the OPEC+ cartel's indifferent behavior. However, the discounted Russian oil didn't directly help the Indian consumers as the price of Petrol and Diesel made no big movements in the domestic market. Russia has continued to provide the discounted rate to India.
The Western nations enforced sweeping sanctions on Russia’s energy sector that broke the nation's economy. Vladimir Putin was forced to resort to selling discounted oil to friendly countries to continue the Ukraine offense. However, much of it changed at the start of 2024 thanks to the moves made by the West.
The ideological opposition of Russia has enforced sanctions on ships and other cargo vessels that carry Russian oil above the price cap. This has severely affected the oil shipments to India. New Delhi hasn't received any crude shipment from Moscow in January due to the shipment sanctions. However, it has redirected vessels and at least 5 cargoes of Sokol crude are expected in India in February.
Ship tracking agency Vortexa shared the data of Russian oil imports by India. The data suggests crude imports from Moscow have declined by 4.2% to 1.3 million barrels per day. Even the Middle Eastern crisis has contributed to the problem as the Houthis blockade of the Red Sea has diverted many shipments away from the region to longer routes.
Vortexa’s Serena Huang said, “The narrowing of Russian crude discounts versus Middle Eastern crude, recent U.S. sanctions on shipowners carrying Russian crude above the price cap, and rising tanker premiums as a result of the Red Sea attacks have made Russian crude less attractive for Indian refiners in recent months.”