- Russian crude oil import: Till a year ago, there was almost no Russian oil supply to India. But after sanctions, Russia is keen to supply India as much oil as it wants.
- Before COVID-19 pandemic, China had emerged as the major consumer of crude oil globally. However, the pandemic had made things worse for Beijing.
- The dragon’s apetite for crude oil has risen once again. And Russia is among the main supplier of oil for Beijing’s rising demand.
Why Russia preferring India over ‘friend’ China in crude oil export? Here is why, explains a Times Now News source.
Moscow prefers India
However, Moscow has preferred India to supply a bulk of its crude oil despite a rebound in Chinese demand. Since the sanctions on Russia by United States and European Union after its invasion of Ukraine, the large part of Russia’s oil is being shipped to India.
Till a year ago, there was almost no Russian oil supply to India. But after sanctions, Russia is keen to supply India as much oil as it wants, a report in Bloomberg said quoting commodity-data firm Kpler.
India’s February oil import from Russia
Around 1.85 million barrels of oil per day was imported by India from Russia in February. This quantity is close India’s maximum potential of two million barrels of oil per day, said Lpler analyst Viktor Katona.
Why Indian market lucrative for Russia
Despite a major surge in oil demand and Beijing’s capacity to buy almost entire Russian oil, Moscow is not willing to let go of Indian market as it gives it sellers flexibility and greater control.
Quoting International Energy Agency (IEA), Bloomberg said that China imported 2.3 million barrels of oil from Russia in January itself.
According to IEA estimates, China’s crude oil demand is expected to rise by 900,000 barrels a day in 2023 after all pandemic related restrictions were withdrawn.
Why Russia preferring India over China
The report also suggest that Chinese refiners also have the capacity to ship their oil. This would deprive Russia of additional income from shipping as it maintains a ‘parallel gray fleet’ of tankers to transport oil to India.
Shorter journey compared to China
Compared to China, the journey to India of oil tankers is shorter. While a vessel takes 40 to 45 days to reach China, it takes just 35 days at most to ship oil to India.
Rosneft‘s stake in India’s Nayara Energy
What is also important is that Russian oil producer Rosneft has nearly 50 per cent stake in Nayara Energy Ltd and other related shipping activities in India. Nayara Energy is the owner of Vadinar refinary in Gujarat.
In February, Vadinar refinary has already absorbed almost all of Russia’s crude stock.
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Source: Times Now News
