- India is buying the most US crude oil in almost a year as flows from Russia slow amid sanctions.
- WTI topped India's purchases this month, despite its higher cost compared to the Middle Eastern equivalent.
- India's refiners see higher WTI consumption in the coming months, Bloomberg reported.
India is buying more American crude oil as Russian energy flows dwindle amid sanctions.
Bloomberg reported on Tuesday that the country is buying the most US crude in a year. India's state-owned oil refiners Bharat Petroleum, Indian Oil, and the country's leading private refiner Reliance Industries, have snapped up nearly 7 million barrels of April-loading crude oil so far in March, the largest monthly inflow since last May.
West Texas Intermediate Midland crude oil accounted for the bulk of India's purchase this month, despite its higher delivered cost compared to the Middle East equivalent benchmark.
WTI is expected to be heavily used in the country in coming months as more people mobilize for local elections, alongside increased power generation and crop harvesting, India's refinery officials said.
Per Bloomberg, traders said India's switch to American oil would hit Sokol oil – the Russian equivalent of WTI Midland – the most.
Since the Kremlin's invasion of Ukraine in February 2022, the West has intensified sanctions on Moscow's energy exports, including imposing a price cap on Russian oil to stem the flow of revenue used to fund the war. Despite this, India is still the biggest adopter of Russian crude.
Experts told Bloomberg that the South Asian country imported 10% of US crude in 2021, but that plummeted to 4% in the past two years as Russia gained market share by selling at deep discounts.
Yet, the impact of sanctions may finally have kicked in as many signs point to India pulling back on buying oil from Russian sources. Russian oil shipments to India fell by 420,000 barrels per day in February, totaling 1.2 million barrels imported daily.
India's top oil refiners are also shying away from long-term contracts with Russian suppliers, and now considering purchases from Saudi Arabia as an alternative.
Meanwhile, other Russian crude varieties, like Urals from the nation's western ports, are also feeling the pinch of stricter sanctions enforcement, as two tankers carrying Urals crude have been idling off the India's coast for weeks.