Russian companies have raised the insurance coverage for India’s oil imports to 60% of all shipments in July, up from 40% in December 2023, as reported by Reuters. This increase underscores the strengthening energy partnership between Russia and India.
India has emerged as the leading purchaser of Russian oil, accounting for over 60% of Russia’s sea-borne oil exports. By utilizing Russian insurers, Moscow can sell its oil at prices above the $60 per barrel cap set by Western nations. This cap is intended to restrict Russia’s oil revenue following the invasion of Ukraine. Western shipping and insurance services are permitted only for Russian oil sold at or below this price limit.
In July, India’s status as the world’s largest importer of Russian oil was solidified, surpassing China. Trade and industry data indicate that India imported 2.07 million barrels per day (bpd) of Russian crude, marking a 4.2% increase from the previous month and a 12% rise year-over-year. This figure surpasses China’s July oil imports of 1.76 million bpd, which include both pipeline and shipped volumes, according to Chinese customs data.
Since Western nations reduced their imports of Russian energy commodities, Indian refiners have been purchasing Russian crude at a discount relative to Brent prices. In July, India’s purchase of Russian ESPO Blend crude surged to 188,000 bpd, facilitated by the use of larger Suezmax vessels. Typically, refiners in northeast China are the primary buyers of ESPO due to their proximity to Russia, but they have been buying less recently due to weak fuel demand.
An Indian refining source told Reuters, “India’s demand for Russian oil is expected to rise as long as there are no further sanctions imposed.” India’s Oil Minister, Hardeep Singh Puri, has confirmed that the country is ready to continue purchasing oil from Russian companies that are not under sanctions, highlighting the appeal of lower prices. He stated, “If an entity is not sanctioned, I will buy from the cheapest supplier without hesitation.”