India Dials Saudi as Russian Crude Oil Purchases Hit 11-Month Low in December

Defense News ,India :- In a noteworthy development, India witnessed a surge in its imports of Saudi oil in December, marking a shift from its usual reliance on Russian oil. The data from vessel tracking agencies revealed that payment issues prompted a decline in Indian purchases of Russian oil to an 11-month low, diverting at least five cargoes of the Sokol variant to alternative destinations.

Indian Oil Corp, a major player in the country oil sector, faced inventory challenges after the anticipated delivery of Sokol oil from Russia was disrupted. As a result, the corporation had to resort to purchasing oil from the Middle East to bridge the supply gap, as disclosed by sources to Reuters last month.

The decline in Russian oil imports for December was substantial, ranging between 16% and 22%, according to calculations by Reuters based on data from flow tracking agencies such as Vortexa, Kpler, and LSEG. Conversely, India oil imports from Saudi Arabia experienced a modest increase of approximately 4%, as reported by Kpler and Vortexa.

Indian Oil Corp, being the sole state-run firm with an annual agreement to purchase various Russian oil grades, including Sokol, from Rosneft, faced challenges due to this unexpected decline in supply. Despite the setback, analysts, including Viktor Katona from Kpler, believe it might be premature to dismiss India interest in the Sokol grade. Recent data indicates that three new Sokol cargoes are en route to India on vessels such as NS Antarctic, Jaguar, and Vostochny Prospect.

Notably, some vessels, including NS Century, NS Commander, Sakhalin Island, Lityny Prospect, and Krymsk, alongside the very large crude carrier Nellis, loaded with Russian Sokol oil for Indian Oil Corp, were observed sailing toward the Strait of Malacca, according to Kpler and LSEG ship tracking data.

The situation took an intriguing turn with the NS Century facing U.S. sanctions imposed in November for the sale of Russian oil exceeding the price cap set by the G7 nations at $60 a barrel. Stranded near Colombo since then, the fate of some cargoes seems to be leaning towards China as a potential destination, as suggested by Viktor Katona.

In conclusion, India oil import dynamics witnessed a notable shift in December, with Saudi Arabia gaining ground while Russian oil purchases declined, posing challenges and prompting strategic adjustments in the country oil procurement landscape.