Feb 9, 2024
Despite Europe’s ongoing ban against energy imports from Russia while the conflict in Ukraine rages on, other countries are snapping up cheap Russian crude — and selling the refined products in European markets.
India became the world’s leading importer of Russian crude oil last year, according to an analysis of Kpler market data conducted by The Independent. India imported an average 1.75 million barrels per day in 2023, skyrocketing by 140% since 2022.
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At the same time, the European Union’s (EU) imports of refined oil from India ballooned to record levels in 2023, surging 115%, from 111,000 barrels per day in 2022 to 231,800 barrels per day in 2023.
“India has been able to buy cheap oil for its refineries, then it has been able to refine that oil and sell the refined products at full price, and into a market [Europe] that is willing to pay up for them because it desperately needs to replace the loss of Russian material that it has applied sanctions on,” Matt Smith, Kpler’s lead analyst, told The Independent.
Russia is finding loopholes around the energy bans
Prior to Russia’s invasion of Ukraine, the EU was the single largest buyer of Russian crude oil and oil products, accounting for nearly half of these exports.
However, since 2022, several countries, like the U.S. and Canada, as well as the EU, have imposed trade sanctions against Russia, with the aim of diverting funds from the country’s military attacks in Ukraine.
Russian deputy prime minister Alexander Novak told Rossiya-24 television in December, that Europe's share of oil and petroleum exports accounted for no more than 4% to 5% of total supplies in 2023.
Novak added that China and India — which have not cut ties with Russia — have become major trade partners instead. "There were virtually no exports to India before. Over the past two years, the total share of exports to India increased to about 40%."
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Why India is capitalizing on Russian crude
Despite the EU curtailing energy trades with Russia, it’s coming full circle after all. Indian refiners are reportedly purchasing Russian crude at a discount and then selling the refined oil in other markets, such as Europe, where there’s major demand for diesel.
“The 1.6-1.8 million barrels a day of Russian crude that Indian refiners buy creates a competitive edge that others do not have,” Viktor Katona, lead crude analyst at Kpler, told Bloomberg in November.
While India banks more on Russian crude, OPEC’s share of oil imports in the South Asian country plunged to a record low of about 49.6% in the first nine months of this fiscal year from April, compared with 64.5% the previous year, Reuters reports.
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Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.
