India's Russian oil imports down in January amid trade talks with U.S.
- Russia could face further sharp drop in oil, gas revenue
- S. and India announced trade deal
- P. Morgan expects India to import 0.8 MMbpd–1 MMbpd of Russian oil
- Russia says no reason to believe India reconsidered oil trade
India's Russian oil imports slipped in January, continuing a downturn that began in December, as refiners sought more alternative barrels under Western sanctions pressure and ongoing U.S.–India trade talks, Reuters sources said and data showed.
Analysts and traders have said Moscow faces a steep decline in oil and gas revenue, which accounts for nearly a quarter of the Russian government's budget revenue, if Washington succeeds in persuading India to stop importing Russia's oil.
On Monday, U.S. President Donald Trump announced a trade deal with India to cut tariffs to 18% from 50% in exchange for New Delhi halting Russian oil purchases and lowering trade barriers.
Indian refiners have been redrawing crude import strategies in recent months to shift away from top supplier Russia and boost imports from the Middle East.
India imported 1.215 MMbpd of Russian crude in January, of which the Nayara refinery accounted for 0.41 MMbpd, with IOC and BPCL taking 0.58 MMbpd and 0.19 MMbpd, respectively, while Reliance imported no Russian crude last month, according to provisional data from analytics firm Kpler.
India's Russian oil imports in January were down by some 12% on a daily basis from December, Reuters calculations showed. Those oil imports in December dropped about 22% from November to 1.38 MMbpd.
"Our base case is that India will largely exit from sanctioned counterparties, but will maintain Russian imports at around 0.8 MMbpd–1 MMbpd, accounting for 17%–21% of total crude imports," J.P. Morgan said in a note.
Russia upbeat about oil trade with India. Russia's foreign ministry said on Wednesday it had no reason to believe that India had reconsidered its approach to Russian oil imports following a trade deal that New Delhi struck with the U.S.
Indian refiners have not been told by the government to stop buying Russian oil and would need a wind-down period to complete purchases already in process, two refining sources said on Tuesday, following the trade deal with Washington.
India's Reliance Industries Ltd, operator of the world's largest refining complex, will buy up to 150,000 bpd of Russian oil from February for its domestic market-focused refinery, a company executive said last week.
The country's largest refiner overall, Indian Oil Corp., has committed to buying more Brazilian crude in the fiscal year starting April, after reducing Russian oil imports.
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