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Russia is consolidating as the main supplier of crude oil and petroleum products to India

Russia has seen a significant increase in its seaborne fuel oil and vacuum gas oil (VGO) exports to India, exceeding the volume of crude oil. As a result, India has consolidated its position as the largest buyer of Russian crude and oil products, displacing shipments from previously dominant OPEC producers. This change has allowed Moscow to generate stable and growing revenues despite Western sanctions.

The European Union’s total ban on Russian oil products, implemented on February 5, has caused a. diversion of fuel oil and VGO from Russia to other regions, primarily Asia. In the month of September alone, Russian ports issued about 1.4 million tonnes of fuel oil and VGO to India after 0.7 million tonnes in August. These cargoes are expected to reach Indian ports in October.

Between January and September 2023, Russia’s fuel oil and VGO exports to India have exceeded 5.5 million tonnes, compared to 2.5 million tonnes during the first nine months of 2022. India has purchased fuel oil and direct VGO for refining, partially replaced the more expensive Ural barrels.

Apart from India, other major importers of Russian fuel oil and VGO include the United Arab Emirates, China, Singapore, Malaysia and Croatia. In particular, Croatia has been able to increase its imports of vacuum diesel, which is allowed under the EU embargo.

On the other hand, in September Russia exported approximately 160,000 tons of fuel oil to Senegal, where it is used to generate energy. However, there were no shipments of fuel oil or VGO from Russian ports to Saudi Arabia last month, following record volumes exported in June and July.

This increase in Russian fuel oil and VGO exports to India and other regions highlights the changing dynamics of global oil market trade. India’s increasing dependence on Russian petroleum products, especially in the face of geopolitical challenges and changing trade patterns, underscores the country’s resilience and resilience.

Frequently Asked Questions (FAQ)

1. Why has Russia increased its fuel oil and VGO exports to India?
Russia has diverted its exports of fuel oil and vacuum gas oil (VGO) to India due to the EU’s complete ban on Russian petroleum products. The change aims to compensate for the loss of European markets and maintain stable revenues despite Western sanctions.

2. How has India benefited from this increase in imports of Russian fuel oil and VGO?
India has cemented its position as the top buyer of Russian crude and oil products, surpassing shipments from previously dominant OPEC producers. The availability of cheaper Russian barrels has enabled Indian refineries to refine fuel oil and direct VGO, partially replacing more expensive Ural barrels.

3. What are the other major importing countries for Russian fuel oil and VGO?
Apart from India, other major importers of Russian fuel oil and VGO include the United Arab Emirates, China, Singapore, Malaysia and Croatia.

4. How has the EU embargo affected VGO imports from Russia to Croatia?
Croatia has been able to buy Russian vacuum gas oil (VGO) under the EU embargo. As a result, the country has increased its VGO imports, especially seen in the increase in imports in October compared to August.

5. Has Russia exported fuel oil or VGO to Saudi Arabia recently?
Last month there were no shipments of fuel oil or VGO from Russian ports to Saudi Arabia, after record volumes were exported in June and July.

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