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India is among the top importers of crude oil, depending on foreign fuels to meet 85% of its requirements. And it seems to have put its overdependence on imported oil to its advantage when the Ukraine war pushed the fuel prices in the global markets. Saudi Arabia seems to have lost out to Russia in a race to sell oil to India.
A Bloomberg analysis shows that Russia has outcompeted Saudi Arabia to emerge as the second largest oil exporter to India in June. This happened as Russia sold its oil at a discounted rate. Iraq played smart by reducing its oil price for India.
In February, when Russia invaded Ukraine, India was hardly buying any oil from Russia. Iraq and Saudi Arabia dominated the Indian basket of oil purchase. The February 24-invasion brought a series of sanctions against Russia.
In March, Russian oil made a sizeable entry into the Indian tanks. But the Russian oil was still $13 costlier compared to Saudi Arabia’s per barrel supplies.
Meanwhile, the oil prices were rising through April and May. In April, Russian oil became cheaper than Saudi oil to India. Iraq was still selling costlier oil to India. Russian stock in Indian tanks kept increasing on account of discounted price.
While Saudi Arabia did not renegotiate its oil pricing for India, Iraq slashed its rates slightly in May and sharply in June. This helped Iraq remain the top exporter of oil to India while Saudi Arabia lost its place to Russia.
The Russian barrels were cheaper than Saudi Arabian barrels from April to June. The gap had widened to nearly $19 a barrel in May before it eased to a $13-difference in June. Oil from Iraq was about $9 a barrel more expensive than Russian crude in May but cheaper in other months.
