India’s Crude Imports from Russia Fall to Cheapest Since War

(Bloomberg) -- The average cost of Russian crude landing on Indian shores in March hit the lowest level since the South Asian nation started lifting discounted barrels from Moscow after its invasion of Ukraine last year.

India paid $70.18 for every barrel of crude oil it purchased from Russia in March, down from $72.14 in February and $118 a year earlier, the latest data published by the Ministry of Commerce and Industry showed.

The drop in prices — which include freight costs — underscores the pressures that refiners face to comply with a price cap of $60 per barrel set by G7 nations. The threshold doesn't include shipping.

The world's third largest crude importer purchased more oil from Russia than ever before in April, according to ship tracking agency Vortexa Ltd., with supplies greater than those from Iraq and Saudi Arabia put together.

Read more: India's Imports of Russian Oil Dwarf Iraq, Saudi Flows

Imports from Iraq, India's second largest supplier, averaged $77.57 per barrel in March while those from Saudi Arabia were much higher at $87.01 per barrel, Tuesday's data showed.

State-owned refiner Chennai Petroleum Corp Ltd said Friday that depending on cargo, Russian barrels were sold $3 per barrel to $8 per barrel cheaper compared to benchmark Brent. A senior government official, who asked not to be identified, told reporters Saturday that India is expecting oil prices to firm up in second half of this year and it will continue to lap up discounted barrels from Russia to shield its import-dependent economy.

According to Vortexa analyst Serena Huang, Russia and India may design alternative financial arrangements to circumvent the hurdles presented by the G7 cap. Still, she expects India's imports from Russia in May to be either lower or unchanged from April's levels as the competition for Russian Urals from China will likely put a lid on India's imports.

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