India's imports of Russian crude oil are set to decline to about 2 million barrels per day in August, down from a record July. Ukrainian strikes on Russian export infrastructure and intensified Chinese buying have squeezed the volumes available to Indian refiners, who are now sourcing more crude from West Africa and the Americas.
India's purchases of Russian crude are pulling back from an all-time high. Kpler's Sumit Ritolia, Manager of Modelling Refinery and Oil Markets, told Bloomberg on Wednesday that August imports are set to decline to about 2 million barrels per day (bpd).
A record July gives way to a smaller August
Crude oil imports from Russia rose to 2.8 million bpd in July, up from 2.7 million bpd in June, the highest average monthly volume ever recorded by vessel-tracking data from Kpler. That July volume accounted for more than half of India's total crude oil imports. Going forward, Ritolia expects India's purchases from Russia to stabilize just above 2 million bpd.
Ukrainian strikes and Chinese demand squeeze the barrels
The pullback stems from a combination of factors. Nearly-daily Ukrainian drone attacks on Russian refineries have raised the volume of crude available for export, but the attacks on export infrastructure have kept Russia from taking full advantage of it. At the same time, China has intensified its buying of cheaper Russian crude, squeezing India out of some barrels. As a result, Indian refiners are looking far and wide for alternative supply to meet demand that is expected to rise in the coming months.
Refiners turn to West Africa as the Middle East crisis bites
Indian state-controlled refiners continue to search the spot market for crude, since term deliveries are constrained by the ongoing crisis in the Middle East and its key chokepoint, the Strait of Hormuz. In recent weeks, India's state-run refiners have kept up a buying spree of crude from West Africa as the Middle East crisis has sapped supply and made deliveries uncertain.
Source: Investing.com
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