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Russian crude imports to India fall as Western sanctions exacerbate payment problems

2024-01-02

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Russian crude oil imports to India have reportedly fallen as Western sanctions have exacerbated payment problems.

The article pointed out: “After hitting an all-time high of 2.15 million barrels per day in May, oil imports from Russia have fluctuated, falling sharply between November and December last year to 1.48 million barrels per day last month. Case."

Analysts pointed out that as sanctions continue to tighten, crude oil cannot be delivered due to payment issues.

Cause of problem

Indian refiners purchased an average of 140,000 barrels per day of crude oil in 2023 but failed to receive any such shipments last month.

Companies drilling for oil in Russia's Far East have been unable to open bank accounts in the United Arab Emirates to allow buyers to pay in dirhams. Victor Katona, chief commodities analyst at Kpler, said two of the six oil tankers anchored off the Indian coast indicated they might change course to go to China.

Russia-India trade continues

Bloomberg suggested that crude oil trade between Russia and India may continue.

"Three additional ship-to-ship transfer operations of the cargo and three new cargoes - Antarctic, Jaguar, Eastern Vision - now indicate India as their final destination," Katona said.

Throughout 2023, India's oil imports from Russia doubled to 1.79 million barrels per day compared with the same period last year, while oil imports from Iraq, the second largest supplier, fell 11% to 908,000 barrels per day.

Russian oil exports

Revenues from oil exports form the backbone of Russia's budget and support Moscow's military economy.

The EU bans seaborne imports of crude oil and petroleum products from Russia. The consequences of this oil ban on Russia are huge, as nearly half of its total oil exports go to the EU. In 2021, the EU imported 71 billion euros worth of oil from Russia, including 48 billion euros in crude oil and 23 billion euros in petroleum products. The loss of this major revenue market has important structural implications for Russia, whose budget relies heavily on oil revenues.

At the same time, Russia faces serious problems on one of its most lucrative oil trade routes since the introduction of Western sanctions, due to currency payment issues and a lack of short-term solutions.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Russian crude imports to India fall as Western sanctions exacerbate payment problems

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