Russia ready to reroute oil to India due to Middle East conflict - Reuters
Kyiv • UNN
Russia is ready to reroute about 9.5 million barrels of oil already near Indian waters to India to compensate for supply disruptions from the Middle East. India is looking for alternative sources of supply, as its crude oil reserves cover only 25 days of needs.
Russia is ready to redirect oil to India to compensate for supply disruptions from the Middle East, with about 9.5 million barrels of Russian oil on ships near Indian waters and potentially reaching the country within weeks. This was reported to Reuters by an industry source with direct access to the information, writes UNN.
Details
The source declined to name where the non-Russian fleet's cargoes were initially headed but noted that they could be delivered to India within weeks, providing quick relief to refiners.
India is vulnerable to supply disruptions as crude oil reserves cover only about 25 days of demand, and refiners have similarly limited stocks of gasoil, gasoline, and liquefied petroleum gas.
An Indian government source said New Delhi is looking for alternative supply sources, preparing for the Middle East conflict to continue beyond 10-15 days.
Search for alternative supply
The disruptions have immediate market consequences: about 40% of India's crude oil imports pass through the Strait of Hormuz, the world's most critical oil export route, and an almost complete closure of this route has forced the third-largest oil consumer to seek alternatives.
Indian refiners process about 5.6 million barrels of oil per day. The Strait became inaccessible after Iranian strikes on vessels, which occurred in response to US and Israeli strikes on targets in Iran that began on Saturday.
An industry source, who wished to remain anonymous, stated that Russia is ready to provide India with up to 40% of its oil needs.
India's imports of Russian oil fell to about 1.1 million barrels per day in January—the lowest level since November 2022, when New Delhi tried to avoid US tariffs, which reduced Moscow's share of total oil imports to 21.2%, according to industry data. The source noted that the share rose to approximately 30% in February.
Indian refiners are in regular contact with Russian oil traders, but any increase in supplies from Moscow will depend on government directives as trade talks with the US continue, two refining sources said.
Last month, US President Donald Trump agreed to lift punitive tariffs on imports from India over its purchase of Russian oil, stating that New Delhi had agreed to "stop buying Russian oil."
India did not do so, insisting that its strategy is to diversify supply according to market conditions and the "changing international situation."
The Indian Ministries of Foreign Affairs and Petroleum, as well as the Russian Embassy in New Delhi, have not yet commented on a possible increase in purchases from Russia. An Indian source said that before the war in Iran, Indian companies had not received instructions to avoid Russian oil.
"Seller's market" for oil
While Russian oil has been sold at a discount to world prices since Russia's invasion of Ukraine in 2022, that difference will now narrow as the "market has become a seller's market," said a source familiar with Russian oil trading.
The source said Russia is also ready to sell liquefied natural gas to India after major supplier Qatar suspended production on Monday due to the escalating conflict.
Indian companies have cut gas supplies to some industrial customers to manage shortages, Reuters reported.
Both China and India, Asia's largest energy consumers, get about half of their oil imports from the Middle East, but India has significantly smaller reserves than China and is more vulnerable to regional disruptions as purchases from Russia have declined under US pressure.
Recall
Trump stated that the US Navy could escort oil tankers through the Strait of Hormuz if necessary, and also ordered the US International Development Finance Corporation to provide political risk insurance and guarantees for shipping in the Persian Gulf.