India’s reliance on Russian crude oil reached a record high in July. According to trade sources, Russia accounted for 50.83 percent of India’s total crude oil imports last month, amounting to approximately 2.47 million barrels per day.
India is the world’s third-largest oil importer and consumer. Data shows that India’s oil imports from Russia in July rose by 62.4 percent compared to July of the previous year. However, imports in July declined by 4.8 percent compared to the record 2.6 million barrels per day seen in June.
Earlier in January, Indian refineries had begun reducing oil imports from Russia to avoid potential high tariffs from the United States. At that time, New Delhi was engaged in trade agreement negotiations with Washington.
However, disruptions in oil supplies from the Middle East—exacerbated by the conflict involving Iran—forced Indian refineries to once again increase their reliance on Russian oil.
Threat of 100% Tariff on Russian Oil
India’s purchase of Russian crude oil now faces new uncertainty. A bill was passed in the US Senate this month proposing a 100 percent tariff on countries that purchase Russian oil.
This move aims to further increase economic pressure on Moscow following the launch of its military campaign in Ukraine in 2022. However, the bill has not yet received approval from the US House of Representatives.
Trade data indicates that in the first four months of the current fiscal year (starting in April), Russia’s share of India’s crude oil imports rose to a record 43.25 percent. During this period, India imported an average of over 2 million barrels of oil per day from Russia. A year ago, Russia’s share stood at approximately 37 percent.
Russia and Latin America Replacing Middle Eastern Oil
The rise in India’s Russian oil imports has primarily impacted Middle Eastern suppliers. From April to July, the Middle East’s share of India’s total crude oil imports dropped to around 30 percent, down from 43 percent a year earlier.
Conversely, the share of oil from Latin America increased from 3.5 percent to 12.7 percent. This shift is primarily due to increased imports from Brazil and Venezuela.
India meets more than 90 percent of its crude oil requirements through imports. Consequently, the country is highly vulnerable to the impact of any major supply disruptions in the global oil trade.
Russia was India’s largest crude oil supplier from April to July. During this period, the United Arab Emirates (UAE) overtook Iraq to become the second-largest supplier.
The UAE, which exited OPEC last April, is releasing large volumes of oil into the market through spot tenders. This has enabled Indian refineries to increase imports from the UAE. Last year, the UAE ranked fourth on the list of India’s oil suppliers.
