The purchase of Russian crude oil has surged 50 per cent in March as India continued to tap alternate sources to make up for the shortfall caused by the supply disruption in the Middle East.
According to a report by news agency PTI, citing tracking data, India has bought around 1.5 million barrels per day (bpd) of Russian crude this month. In February, the purchase was 1.04 million barrels per day.
How did West Asia war affect India's oil imports?
India is the world's third-largest crude importer and consumes 5.8 million barrels per day. Out of this, 2.5-2.7 million bpd is sourced from West Asian countries like Saudi Arabia, Iran and the UAE.
The West Asian crude passes through the Strait of Hormuz, a flashpoint for the war between the US, Israel, and Iran.
The chokepoint also carried 55 per cent of India's cooking gas (LPG) and 30 per cent of liquefied natural gas (LNG). Both are used for domestic cooking, power, fertilisers, and CNG.
Is Russian crude proving sufficient or just narrowing the shortfall?
According to Sumit Ritolia, an analyst at Kpler, "Based on vessel tracking and credible market sources, incremental Russian crude imports in March could reach 1-1.2 million bpd (over and above the February volumes), which means the effective shortfall from Hormuz exposure narrows to around 1.6 million bpd".
He added that crude supply risk could be partially mitigated through diversification, including from Russia. However, the real challenge that India is focusing on is ensuring the availability of LPG in the coming weeks.
India consumes around 1 million barrels of LPG daily. Out of this, only 40-45 per cent is produced domestically, while the remaining 55-60 per cent is sourced from other countries. Around 80-90 per cent of this import transits through the Strait of Hormuz.
(With PTI Inputs)