India oil imports shift back to Middle East as Russian purchases ease

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India oil imports shift to Gulf

Highlights

India's crude imports from the Middle East rise to 2.8 million bpd in September, making up 54% of imports versus 32% in August.
Russian oil imports to India fall 14% month on month to about 1.8 million bpd in September, with Russia's share dropping from 46.6% to 33.5%.
Premiums on Russian oil versus Brent narrow from over $10 to $1–$2 per barrel, prompting Indian refiners to favor cheaper, closer Middle Eastern supplies.

September import mix turns toward Gulf suppliers

As reported by Reuters, ship-tracking data show India's crude imports from the Middle East rise in September to about 2.8 million barrels per day, the highest since February, after producers and traders boost shipments through the Strait of Hormuz and ease earlier supply constraints. Gulf oil accounts for about 54% of India's overall imports, up from 32% in August.

India, the world's third-biggest oil importer, initially raises purchases of Russian crude to offset reduced Middle Eastern supply at the onset of the war. In September, however, Russian oil imports fall about 14% from the previous month to about 1.8 million bpd, with Russia's share of India's oil purchases declining to 33.5% from 46.6%.

India's total crude imports in September rise 20% month on month to around 5.33 million bpd. Russia remains India's largest oil supplier, followed by the United Arab Emirates and Iraq, while imports of Iraqi oil climb to about 830,000 bpd from 171,000 bpd in August.

Price competition reshapes refinery buying

An Indian refining source says Russian oil purchases by Indian refiners are likely to remain subdued in the coming months because the landed cost of Russian crude is now comparable to some Middle Eastern grades, mainly Iraqi oil. Premiums on Russian oil narrow to $1-$2 per barrel against Brent from more than $10 in recent months as Middle Eastern supplies return to the market.

Refiners prefer to maximize purchases of discounted Middle Eastern crude because voyage times are shorter, and some producers cut selling prices to offset soaring freight costs, the source says. "We will buy from whoever offers us better prices," the source says, underscoring how freight, discounts and regional supply recovery are reshaping India's crude sourcing.

Our earlier coverage of the Strait of Hormuz shipping disruption explained that prolonged delays are already spilling over into global food supply chains by constraining fertilizer flows, raising transport costs, and influencing planting and harvest decisions. We noted that these knock-on effects were pushing agricultural commodity prices higher and increasing food security risks across parts of Asia and Africa as supply chain uncertainty persists.

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