New Delhi: Amid renewed uncertainty around the Strait of Hormuz, Russian crude continues to dominate India’s imports, averaging around 2.5 million barrels per day (mbpd) until 15 July, and expected to remain a key part of the country’s refining mix, according to trade data analytics firm Kpler.
Russia supplied around 2.6 mbpd of crude to India in June, accounting for more than half of the country’s total oil imports. The preliminary July arrivals are also tracking at around 2.5 mbpd, keeping Russia’s share close to 50 percent, Sumit Ritolia, Manager of Oil Markets and Refineries at Kpler, told ThePrint.“From India’s perspective, Russian crude has become its strongest energy-security hedge, particularly since the Strait of Hormuz disruptions,” Ritolia said.
He said discounted Russian barrels have enabled Indian refiners to maintain high utilisation rates, ensure uninterrupted domestic fuel supplies and avoid feedstock constraints experienced elsewhere in Asia. With remaining alternatives being costlier and limited, Russian crude is unlikely to disappear from India’s refining system anytime soon, he added.His assessment comes as the Strait of Hormuz, one of the world’s most critical oil transit chokepoints, remains under close watch despite shipping resuming following the interim agreement between the US and Iran. However, the markets remain wary given the fresh escalation between the two countries.According to experts, India’s crude position is considerably stronger as refiners have diversified sourcing over the past few years. However, they caution that the country’s dependence on Hormuz remains significant for liquefied petroleum gas (LPG) and liquefied natural gas (LNG), making these energy products far more vulnerable than crude oil.
