ENB Pub Note: The global oil demand side of the pricing equation looks at India and China as the two biggest matrices for international pricing. The fact that India is rolling on high import levels, and China is looking flat, is a good thing for the demand curve.
- India is expected to import nearly 1.8 million bpd of Russian crude in May, the highest since July 2024, fueled by a surge in ESPO purchases.
- Refiners have pre-booked over 10 ESPO cargoes for June, even as EU sanctions target Russia’s shadow tanker fleet.
- Despite an overall drop in Indian crude imports in April, Russian oil maintained a 40% share, with reduced reliance on shadow tankers.
According to vessel-tracking data by Kpler, India is on track to import nearly 1.8 million barrels per day (bpd) of crude oil from Russia in May, a 10-month high.
Indian refiners have increased buying activity for lighter Russian grades, such as ESPO, showed the Kpler data cited by Reuters.
The strong Indian imports of ESPO crude are set to continue in June and July as refiners have booked more than 10 cargoes of the grade loading in June, traders told Reuters.
India’s latest surge in ESPO purchases came before the new round of EU sanctions on Russia’s shadow fleet announced on Tuesday.
ESPO is being exported from the Far East Russian port of Kozmino and the biggest buyer of the grade is China, the other major customer of Russia’s crude oil.
Stronger demand in India has raised spot premiums of ESPO crude to China.
Kpler said earlier this week it is “neutral to bullish on India’s crude imports from Russia, with more tankers joining the fleet to transport Russian cargoes.”
Russian exports to India began to recover in March after the U.S. sanctions on Russia’s oil trade in January shocked the market and traders moved to readjust flows to the use of more non-sanctioned tankers.
India’s crude import volumes from Russia soared in March by 41% from February, to hit the highest level since July 2024, according to ship-tracking and customs data compiled and analyzed by Finland-based research group Centre for Research on Energy and Clean Air (CREA).
India’s total imports of crude oil fell by 11% in April, but Russian volumes stayed stable and accounted for 40% of all imports. ESPO crude imports rose to the highest levels in the last two quarters, CREA said last week.
Moreover, CREA’s analysis showed that the use of shadow tankers for Russian crude oil transport fell from 81% in January to 65% in April.