REUTERS/Shamil Zhumatov
- Russia is selling record amounts of crude oil to India to plug its shortfalls from the EU oil ban, according to Vortexa.
- Indian imports hit a record 1.2 million barrels a day in December, and 1.3 million barrels a day in the first two weeks of January.
- "Russia has done well in enticing Indian refiners to increase purchases of its crude," Vortexa's head of Asia-Pacific analysis said.
Russia is selling record amounts of crude oil to India to plug the gap in its energy exports after the European Union banned imports in December, according to a recent report from Vortexa.
The energy analytics firm said Russia handed off 1.2 million barrels a day of its crude oil to India in December, notching a new record high.
And Russia is set to top that record in January, with nearly 1.3 million barrels a day already shipped in the first two weeks this month, Vortexa said. Russian crude now accounts for 60% of India's oil imports, compared to 48% in December.
"Since the EU ban took effect last December, the reshuffle of Russian crude has been much smoother than many market participants had anticipated," Vortexa's head of Asia-Pacific analysis, Serena Huang, said in the note. "Russia has done well in enticing Indian refiners to increase purchases of its crude as the EU pivots away."
While the volume of oil sold to India is up sharply, the revenue Moscow earns from it is limited by weak prices. In December, the EU banned Russian seaborne oil and imposed a $60 price cap, which prevents other countries from using EU shipping and insurance services, unless oil is sold below the cap.
Those restrictions caused Russia's crude revenue to plunge $15 million in the last week of 2022, and the country has been forced to divert 90% of its oil to Asia to make up for the lost business.
And while China and India have ramped up their buying of Russian crude, they have been able to demand heftier discounts, which is costing Russia around $4 billion a month, according to estimates from Bloomberg.
Oil markets could be further disrupted when the EU bans Russian oil products, including diesel and fuel oil, on February 5.
EU officials are also weighing various price caps with considerations for a $100-a-barrel price cap for Russian diesel and a $45 cap for Russian fuel oil.