Indian refiners are cutting purchases of Russian crude for November delivery as Urals loses its main advantage - its low price. Russian oil loaded from Baltic ports is now being offered at a premium of more than $10 per barrel over Brent, Bloomberg reported. That puts its price almost in line with Middle Eastern crude.
The shift is causing Indian companies to shift some of their orders to Gulf suppliers. Some Russian cargoes originally purchased for India are now being offered to independent Chinese refiners.
China steps up pressure for Russian barrels
Competition for Russian crude is increasing due to more active purchases from China, including against the backdrop of limited access to Iranian oil.
Kpler data shows that the share of Russian oil in Indian imports fell to about 35% in September from a peak of 56% in July. According to tanker traffic data cited by Bloomberg, deliveries in the four weeks to Oct. 4 averaged about 310,000 barrels per day – the lowest level since March 2022.
The Middle East is becoming more attractive again
Deliveries to India from the Middle East continue to grow. Shorter logistics routes are reducing transport costs at a time when tanker shipping is becoming more expensive.
Shell CEO Wael Sawan estimates flows through the Strait of Hormuz at about 80% of pre-war levels. This makes it easier for Indian refiners to access alternative volumes, while Russian cargoes are no longer offered at the previous discount.
American pressure and the risk of sanctions or additional tariffs also remain a factor in the decisions of Indian buyers. However, according to published data, the immediate reason for the decline in orders is economic: Russian oil has lost its price advantage over supplies from the Persian Gulf.