"Russia's Discounted Oil Surges in India, Threatening OPEC's Market Share and Western Sanctions"

 

India's oil market is experiencing a significant shift as it buys large amounts of discounted Russian oil, reordering its list of top suppliers. The latest data reveals that the share of OPEC members in India's oil market dropped to 59% last year, and their market share could further decrease due to OPEC's planned production cuts.

India has been a significant customer of Russian oil suppliers since the invasion of Ukraine, and its appetite for cheap crude from the heavily sanctioned country has significantly reduced imports from OPEC nations to their lowest level in 22 years. According to Reuters' data analysis, Russia overtook Iraq as India's top oil supplier for the first time and pushed Saudi Arabia to the third spot.

India imported around 1.6 million barrels per day of Russian crude, accounting for 23% of its 4.65 million barrels per day. Meanwhile, India's overall crude oil imports surged by 9% last year to meet the soaring demand for oil in the country.

India and China are buying up so much discounted Russian oil that the country is shipping more crude than before Vladimir Putin ordered the invasion of Ukraine in February last year. Kpler, a commodities research firm, reports that the two countries account for about 90% of Russia's oil trade.

However, as India's imports of Russian oil rise, there are concerns that some countries are laundering the cheap oil for sale to Western countries that have sanctioned trade with Moscow. Analysts at the Center for Research on Energy and Clean Air have highlighted this issue.

Furthermore, as OPEC+ countries push forward with planned production cuts, there is a possibility that elevated levels of Russian oil on the market will spread throughout Asia, reducing OPEC's market share in the region further.

In conclusion, India's increasing reliance on Russian oil suppliers is transforming the country's oil market dynamics, with significant implications for OPEC's market share in India and Asia more broadly. However, it is crucial to address the issue of laundering Russian oil to prevent the risk of violating Western sanctions.