India Diversifies Crude Imports Amid Declining Russian Supply

Key Highlights:

1. Petroleum Price Trends – VG30 Bitumen in Panipat at ₹47,352/MT; Base Oil (N150) in Delhi at ₹67.5/LTR.
2. Decline in Russian Crude Imports – February imports down 14.9% amid US-UK sanctions.
3. Diversification of Oil Suppliers – Increased imports from Iraq, Nigeria, and Latin America.
4. Crude Market Movements – WTI crude rebounds; Malaysian crude priced at $81.71/barrel.
5. Analyst Outlook – India expected to continue diversifying energy sources to mitigate geopolitical risks.

Petroleum Price Trends Across India

• Refinery Bitumen (VG30) is priced at ₹47,352 per metric ton in Panipat, while Roadgrip Bitumen Emulsion (RS 1) stands at ₹33,810 per metric ton in Mathura. 
• In Delhi, Base Oil (N150) is available at ₹67.5 per liter, and Lubriedge Rubber Process Oil (Paraffinic 245) is priced at ₹72 per liter. 
• Fuel Oil (Virgin 180cST Furnace Oil) in Mundra costs ₹48.5 per kg. 
• In Bhiwadi, LubriEdge Hydraulic Oil (68) is ₹87 per liter, LubriEdge Gear Oil (150) is ₹115 per liter, and LubriEdge Rust Preventive Oil (Water Displacing Type) is the highest-priced at ₹122 per liter.

Demand-Supply: Iraq, Saudi Arabia, and Africa Fill Supply Gaps

• India’s crude oil imports from Russia have seen a sharp decline, reaching their lowest levels in over a year. This drop comes as a result of fresh sanctions imposed by the United States and the United Kingdom, targeting major Russian oil producers such as Gazprom Neft and Surgutneftegas, along with 183 tankers involved in transporting Russian crude. 
• The sanctions have disrupted shipments, forcing India, the world’s third-largest oil importer, to seek alternative suppliers. According to data from Kpler, India’s crude imports from Russia declined by 14.9% in February, averaging 1.4 million barrels per day.
• To compensate for the shortfall, Indian refiners have increased purchases from other oil-exporting nations, particularly Iraq and Saudi Arabia. Iraqi shipments to India rose by 8.3%, while refiners also turned to Nigeria, Angola, Mexico, and Colombia to ensure a steady supply. With Russian crude facing logistical and regulatory challenges, India has been diversifying its import portfolio to maintain energy security.
• Despite the sanctions, Moscow remains committed to supplying oil to global markets, including India. Russia's First Deputy Energy Minister, Pavel Sorokin, reaffirmed the country's pragmatic approach to maintaining its energy trade. 
• Additionally, Russia is looking to expand its liquefied natural gas (LNG) shipments to India, seeing an opportunity to strengthen its presence in the country’s growing energy sector. Currently, India sources nearly half of its LNG demand from Qatar and the US, and Moscow aims to capture a greater market share in this segment.

News: Crude Oil Prices Rebound on Chinese Manufacturing Strength

• Crude oil prices edged higher on Monday, climbing 2% to $70.50, as China's latest manufacturing data injected fresh optimism into the market. Crude oil futures rise on strong Chinese manufacturing data, impacting the global oil market, while uncertainty looms over the US-Ukraine conflict.
• The official selling price of a basket of February-loading Malaysian Crude Oil grades has been set at $81.71 per barrel, a price document showed on Monday.WTI crude oil is still in correction mode as it breaks above the mid-channel area of interest and goes for a larger pullback to the 50% Fibonacci level.
• Dangote refinery placed an order for Algerian crude due to a local supply shortfall, while Indian refineries turned to Nigeria for crude following a decline in Russian imports.
• India's crude oil imports from Russia witnessed a significant decline in February, reaching their lowest level since January 2023, following new sanctions by the US and UK.
• Output in India's eight core infrastructure sectors, which constitute about 40% of overall industrial production, grew 4.6% in January, slightly slower than previous months.
• Iraqi and Saudi Arabian crude supplies to India remained consistent in February as Russian shipments declined due to Washington’s sanctions on Moscow.
• India’s chief economic adviser stated that the country’s long-term economic prospects remain intact, dismissing concerns over equity market volatility and the impact of likely US tariffs.

Market Expectation: India’s Energy Strategy in Focus

Analysts predict that India's crude oil imports from Russia may continue to decline in the coming months as sanctions further limit Russian export capabilities. Indian refiners are expected to expand energy partnerships with Middle Eastern, African, and Latin American producers to offset supply risks. While Russia remains a crucial supplier, India is likely to secure diversified energy sources to maintain stable crude availability and minimize geopolitical disruptions.