Preliminary ship tracking data indicates that India’s daily crude oil imports from its primary supplier, Russia, are set to increase in February compared to the previous month, with the resumption of the light sweet Sokol grade playing a significant role in this uptick.
While the current figures show a rise in Russian oil imports, forecasts suggest a potential slowdown in the coming months as the United States intensifies shipping sanctions, compelling Indian refiners to seek alternative sources.
The recent sanctions target Russia’s prominent tanker group Sovcomflot, accused by Washington of violating the G7 price cap, along with 14 tankers linked to the company. This development, coupled with escalating freight costs, is expected to impact discounts on Russian oil, which have already decreased to approximately $3.5-$4 per barrel.
In February, India’s Russian oil imports surged to around 1.46 million barrels per day, reflecting a 7.6% increase according to Kpler and an 11.7% rise as per data from Vortexa. Despite this growth, India also boosted imports of Saudi Arabian grades while scaling back on Iraqi oil intake.
Analyst Emma Li from Vortexa noted that Indian refiners had refrained from purchasing the Sokol grade in December and January due to payment issues. The resumption of Sokol grade imports in February contributed significantly to the spike in Russian oil imports.
India’s emergence as a key buyer of discounted Russian oil last year, following Western countries’ suspension of imports post Russia’s invasion of Ukraine, underscores the evolving dynamics in global oil trade.