NEW DELHI: Indian refiners expect Russian oil supplies to decline further in October and November, owing to lower exports and stiff competition from China, forcing the country to buy costlier alternatives for the rest of the year.People familiar with procurement plans told Reuters that some Indian refiners would not receive adequate Russian supplies in October and November.“Demand from China has been really high. They were willing to book cargoes in advance and to pay firmer prices compared to Indian refiners,” a source involved in the sale of Russian crude said.According to analytics firm Kpler, Russian oil arrivals in India are set to drop to around 1.75 million barrels per day in September, the lowest level since April.Trade data showed that arrivals had already fallen 16.5 per cent to about 2.1 million bpd in August from July, although Russia remained India’s main supplier, ahead of the UAE and Venezuela.Overall availability of Russian exports has reportedly shrunk, particularly from the Black Sea port of Novorossiysk, where shipments have roughly halved as repeated drone attacks have suspended loadings.India has been the top buyer of seaborne Russian Urals crude since 2022, when Moscow diverted its energy flows away from Europe at deep discounts. In recent months, however, China, the world’s top crude importer, has stepped up its purchases as Middle Eastern supplies tightened because of the Iran war.
Alternatives
Traders told Reuters that refiners have turned to pricier replacement barrels, seeking UAE Murban, a close substitute for Russia’s Urals grade, while also buying Iraqi Basrah and Angolan cargoes.
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Shipping dynamics have helped redirect flows to China.Seasonal navigation along the Arctic Northern Sea Route (NSR) offers a secure and cost-effective channel for Russian crude exports to China, whereas shipments to India via the Red Sea face heightened security risks linked to the conflict involving Yemen’s Iran-aligned Houthis.“It’s not so much about the price as ensuring the cargo actually reaches its destination,” another trader told Reuters, adding that freight costs via the Arctic route to China are now broadly comparable with shipments through the Suez Canal.
