In July, India overtook China to become the world’s largest importer of oil from Russia.
Chinese refiners say they are not earning as much profit from fuel production as they used to.
Due to this, they reduced the purchase of Russian oil. But due to this, India’s oil purchase increased.
Russian crude oil accounted for a record 44% of India’s total imports last month, up 4.2% from June and 12% from a year earlier.
News agency Reuters gave this information citing import data. It said that India imported 2.07 million barrels per day (bpd) of oil from Russia in July, which is a new record.
This figure is based on Indian shipment data received from trade and industry sources. At the same time, China imported 1.76 million barrels per day (bpd) of oil from Russia in July, which is less than India.
There are sanctions on Russia, it is selling oil at a low price
Western countries led by the US have imposed strict sanctions against Russia. In response to Russia’s invasion of Ukraine, these countries have almost stopped buying oil from Russia.
Due to this, Russia is selling oil at a huge discount. Indian refinery companies are taking full advantage of the Russian oil sold at a discount.
India’s purchases of Russian oil will keep rising unless sanctions are tightened further, an Indian refining source said.
India’s trade with Russia has increased since Russia started the war against Ukraine in February 2022. This has happened mainly due to oil and fertilizer imports.
This move by India is helping to curb global prices and control inflation.
ESPO Blend is now coming to India
India’s rising purchases have diverted flows of Russian ESPO blend crude oil from traditional Chinese buyers to South Asia.
India’s ESPO imports rose to 188,000 barrels per day (bpd) in July. Data showed that India used larger Suezmax vessels to import this oil this time.
This trade shift has not only helped India strengthen its energy security but also established it as a major player in the global energy market.
Also, fertilizer imports have played an important role in maintaining stability in India’s agricultural production.
Refiners in northeastern China are usually the biggest buyers of ESPO blends due to their proximity, but their demand has declined due to low demand for the fuel.
Iraq remained the second-largest oil supplier to India last month, followed by Saudi Arabia and the United Arab Emirates.
What is ESPO Blend?
ESPO Blend is a type of crude oil that comes from the Far Eastern region of Russia. It is exported through the “East Siberia-Pacific Ocean” (ESPO) pipeline, hence the name ESPO Blend.
The quality of this oil is considered to be very high because it has low sulphur content, making it easy to refine and suitable for producing high quality products like petrol, diesel.
Earlier, the major buyer of ESPO Blend was China, but in recent times, India has also become a major importer of it.
ESPO blend is also in high demand because it is low cost in refining and produces high quality fuel.
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