India’s insatiable appetite for discounted Russian oil is eroding the dominance of traditional suppliers from the Middle East to Africa and the US in one of the world’s most lucrative markets. 

The share of the Eurasian region, which includes Russia, in India’s overall crude oil imports reached a record 18.8 per cent during April-June from 3.4 per cent in the preceding 12 months, according to the oil ministry’s Petroleum Planning & Analysis Cell. The other regular supplier from the region is Azerbaijan, which accounts for a small fraction. 

Oil imports from the Middle East, which is India’s biggest sourcing region, slipped to 61.9 per cent from 63.9 per cent in the previous one year, while those from the Organization of the Petroleum Exporting Countries, or OPEC, decreased to 64.8 per cent of total imports during April-June compared with 69.7 per cent a year earlier.

India has been diversifying its oil sourcing to reduce dependence on the Middle East and has stepped up imports from the US after it started exports in late 2015. But purchases from North America, which includes US, Mexico and Canada, halved to 6.8 per cent from the previous 12 months, while Africa dropped to 9.2 per cent from 13.6 per cent, the data showed. 

Russian oil has been muscling into Indian and Chinese markets and eating into the share of Iraq and Saudi Arabia in the world’s biggest oil-consuming region. Refiners in India have been gorging on cheap Russian barrels more than they ever did before the invasion of Ukraine.