India imported $2.8 billion worth of crude oil from Russia in July, solidifying its position as the second-largest buyer of Russian oil, according to a report by news agency PTI on Friday. China remains the top importer of Russian oil, while India, the world’s third-largest oil consumer and importer, has significantly increased its purchases from Russia.
The surge in India’s imports follows Russia’s decision to offer discounted oil after European countries imposed sanctions and boycotted Russian oil in response to the invasion of Ukraine. Prior to the conflict, Russian crude accounted for less than 1% of India’s total oil imports. However, recent reports indicate that Russian oil now makes up nearly 40% of India’s total crude oil purchases.
Data from the Centre for Research on Energy and Clean Air (CREA) reveals that China absorbs 47% of Russia’s crude oil exports, with India following at 37%. The European Union and Turkey take up 7% and 6%, respectively. In addition to crude oil, India and China have also increased their coal imports from Russia. Between December 2022 and the end of July 2024, China accounted for 45% of Russia’s coal exports, while India purchased 18%. Turkey and South Korea each bought 10%, and Taiwan rounded out the top five buyers with 5%.
The report highlighted India’s growing dependence on Russian fossil fuels, noting that nearly 80% of India’s imports from Russia in July, valued at €2.6 billion (or $2.86 billion), were crude oil. Overall, India, which relies on imports for over 85% of its oil needs, spent $11.4 billion in July to import 19.4 million tonnes of crude oil, according to official data cited by PTI.
Price Cap and Shadow Tankers
In July, the discount on Russia’s Urals-grade crude oil increased by 9% month-on-month to $16.76 per barrel compared to Brent crude. Discounts on the ESPO grade and Sokol blends remained steady at $4.23 and $6.11 per barrel, respectively.
CREA’s data also revealed that 36% of Russian seaborne crude oil and its products were shipped using tankers regulated under the oil price cap policy. The remaining oil was transported by so-called “shadow” tankers, which circumvent the price cap restrictions.
The price cap policy, introduced by the US and Western nations in late 2022, was designed to keep Russian oil prices within limits while restricting Russia’s revenue from crude oil sales. Under this policy, Russian oil can only access Western services, such as insurance and shipping, if sold below $60 per barrel. However, to evade these restrictions, a “shadow fleet” of tankers with unclear ownership has emerged, allowing Russia to bypass the price cap.
According to CREA, 81% of the total value of Russia’s seaborne crude oil was transported by these shadow tankers, while only 19% was moved by tankers owned or insured in countries enforcing the price cap. The report noted that Russia’s decreasing reliance on G7-owned or insured tankers has weakened the coalition’s ability to leverage the price cap and reduce Russia’s oil export revenues.