India resumes purchasing Russian crude oil

Indian Oil Corp. resumed its purchase of Russian crude oil transported via a tanker owned by Sovcomflot PJSC this week, marking a significant step towards restoring oil flows between Russia and India, Bloomberg reported on Thursday. Tightened US penalties had previously disrupted these shipments.

The Suezmax tanker Vladimir Tikhonov unloaded approximately 1 million barrels of Russian flagship Urals crude at Paradip port on Thursday, as per Bloomberg ship-tracking data. This marks the first delivery of crude by a Russian state tanker giant since the SCF Baltica, a smaller vessel, offloaded fuel oil last week off Sikka, Gujarat.

Indian Oil has not responded to requests for comment.

The decision by India’s largest refiner to accept a Sovcomflot tanker is notable as it may encourage other smaller refiners to also utilise Sovcomflot vessels for their Russian oil purchases.

In March, Indian refiners, major buyers of Russian crude since the Ukraine conflict, had decided against receiving oil transported on all Sovcomflot tankers following stricter US sanctions imposed in February. However, an evolving network of traders and marketers has enabled some oil flows from Moscow.

Since US officials visited New Delhi last month and indicated that they did not anticipate India to halt Russian oil purchases, Indian refiners have become more comfortable with buying Russian crude, even on Sovcomflot tankers. This aligns with Washington’s interest in ensuring continuous energy supply to prevent supply shocks.

In April, India’s daily crude imports from Russia surpassed 1.9 million barrels, the highest since July, according to data from Kpler.

Deliveries of Urals and Sokol have notably increased month-on-month, while shipments from Iraq and Saudi Arabia, India’s second and third largest oil suppliers, have decreased.

Furthermore, at least five Sovcomflot tankers carrying Urals are indicating India as their destination this month, with the tanker Suvorovsky Prospect currently anchored off the country’s west coast, according to Bloomberg ship tracking data.