India Deepens Energy Trade with Russia Through Rising Petrol Exports

India has emerged as a key exporter of petrol to Russia, with shipments touching nearly 1 million barrels over the past two months as widespread Ukrainian drone attacks have crippled the country’s refineries, forcing Moscow to take recourse to imports to meet domestic demand, according to a report by ship-tracking data and energy analytics firm Vortexa.

Russia’s seaborne gasoline imports surged to a record 470,000 tonnes in August, with long queues of cars at local filling stations reflecting the shortage of fuel amid the shutdown in refineries due to Ukraine’s drone attacks deep into Russian territory. The report states that Russia’s domestic fuel production dropped by as much as 70 per cent. This has also forced Russia to ban exports of petrol and diesel to tackle the acute shortage.

Vortexa said as many as 32 attacks were carried out on Russian refineries during July and August, averaging roughly one every two days.

Indian refiners were among important suppliers along with Turkey and Morocco to help Russia meet the shortfall in domestic production of fuels. Trade sources said much of India’s supply came from Nayara Energy’s refinery at Vadinar on the Gujarat coast, in which Russian oil major Rosneft has a share.

As global refining capacity faces uncertainty, India is expanding its position as the world’s third-largest refiner, with capacity rising from 272 MMTPA towards 300 MMTPA, Minister for Petroleum and Natural Gas Hardeep Singh Puri said earlier this month.

Meanwhile, India has diversified its sources for the import of crude oil to 41 countries compared with 27 earlier, following the breakout of the Iran war and closure of the Strait of Hormuz, through which 20 per cent of the world’s oil and gas exports transits during normal times.

India’s crude imports from Russia have shot up in recent months due to the choking of the Strait of Hormuz amid the Middle East conflict. During July Russia accounted for more than half of the country’s total oil imports, displacing UAE and Saudi Arabia as the largest supplier of crude to India.

India’s imports of crude oil from Russia are expected to be around 2.1 million barrels per day (mbpd) in August, down sharply from the record levels of around 2.6 mbpd seen in July and June this year, fresh data from shipping intelligence and research firm Kpler shows.

Despite the decline in August, Russia remains India’s largest supplier, accounting for more than 40 per cent of the import. Russia is followed by the United Arab Emirates (UAE) at 611,000 barrels per day (or 611 kbpd), Saudi Arabia at 385 kbpd, Venezuela at 383 kbpd, Nigeria at 129 kbpd, and Brazil at 120 kbpd.

India imports over 85 per cent of its crude oil requirement, which makes it crucial for the country to ensure supply chain resilience and access to multiple sources of energy in order to reduce the risk of sudden disruptions during a period of geopolitical uncertainty in which the global energy market has turned highly volatile.

This diversification has reduced dependence on any particular country, region or transit route and enhanced India's ability to manage supply disruptions and market volatility.