Indian refiners likely to buy more oil from West Asia after Russia sanctions

Indian refiners may procure additional crude oil supplies from West Asia, including Iraq, Saudi Arabia, and the UAE, after the US slapped sanctions on two major Russian oil firms, Rosneft and Lukoil, according to analysts.

- SHUBHANGI MATHUR

Viewed as the strictest measure by the US government against Russia since the Ukraine war started in 2022, the sanctions are expected to limit Indian refiners’ purchase of crude oil from Moscow. Of the total Russian oil volumes coming into India, around 60-70 per cent is supplied by the two sanctioned firms.

“India and Turkey are likely to cut imports (of Russian oil) from the current levels of nearly 2 million barrels per day (bpd) while evidence of Chinese state-owned companies cancelling Russian purchases will further support buying of Middle Eastern medium sour grades,” said Janiv Shah, vice president-commodities markets at Rystad Energy.

Refiners will likely lean on Iraqi Basrah Medium, a type of crude oil, barrels to replace lost Russian grades. India already sources significant volumes of crude oil from West Asia. Iraq supplies around 20 per cent of New Delhi’s oil imports while Saudi Arabia and the UAE account for 12 per cent and 10 per cent, respectively.