As Moscow's invasion of Ukraine changed trade patterns, India has moved into a niche of the Russian oil market formerly dominated by China and taken a record amount of supplies of a Far Eastern quality.
According to dealers and shipbrokers, six boats carrying the Russian oil known as ESPO were en route to refineries in the South Asian country in August. That is approximately one-fifth of all monthly shipments and is the most cargo India has bought since the stream was first established.
Emma Li, analyst at Vortexa Ltd., said, "ESPO crude is now becoming a constant flow for India, a country that wasn't very fond of the variety for years." As long as the pricing remains competitive and no actual bans prevent the transaction, the shipping to India will take longer, but it may still happen.
In the wake of the invasion, India has emerged as a significant consumer of Russian energy, snatching up millions of barrels of cheap oil that Europe and the US had avoided. The third-largest oil importer initially increased imports of the flagship Urals crude, which loads from the western part of Russia, as the crisis went on, and is now competing for ESPO, a distillate-rich grade that comes from the eastern region of Russia, the east and was typically favored by Chinese buyers.
According to the merchants and shipbrokers, certain flows from Saudi Arabia and Abu Dhabi will likely be replaced by ESPO supplies to India since they are less expensive than the country's customary Middle Eastern grades. Indian bidders were able to pounce on some quantities after China's Sinopec recently reduced its imports, they claimed.
The ESPO export rate in August increased from July when five cargoes were shipped to ports in Vadinar, Sikka, Paradip, and Mundra. Nearby those terminals are refineries run by private processors Reliance Industries Ltd. and Nayara Energy Ltd., as well as state-owned Indian Oil Corp.
India wasn't a significant player in the trade before this year's buying binge, local refiners noted things like ESPO's modest cargo size of 100,000 tonnes being unfavorable for the long and expensive travel from Kozmino, where it is loaded. As a result, countries in North Asia, including China, South Korea, and Japan, are now vying for the 30 to 35 cargoes sent out each month.