- India is buying more American crude as it pulls back from trading with Russia, Bloomberg reported.
- Shipments of US barrels are at the highest since May of last year.
- Russian imports took a hit as Western sanctions bite down on Moscow’s ability to ship crude.
American barrels are pouring into the Indian market, prompted by a demand shift of Washington’s own making.
That’s as Western sanctions on Moscow have cracked New Delhi’s appetite for Russian crude, causing India to pivot towards US exports.
7.6 million US barrels are estimated to have shipped to India in March, marking the highest level since May of last year, Kpler data showed, cited by Bloomberg. It’s an impressive increase from the start of the year, when India imported only 3 million US barrels in January.
At the same time, Indian purchases of Russian oil have tumbled, as the US and its allies tightened enforcement of sanctions against Moscow.
For instance, Washington has started individually sanctioning entities that breach a Western price cap on Russian barrels, and has targeted over 50 ships since October. It’s also singled out the Russian tanker firm Sovcomflot, and Indian refineries have since stopped accepting shipments carried by the company’s vessels.
Though India is in part curbing its trade with Russia out of fear of secondary sanctions, stricter US scrutiny is also cutting into the benefits of dealing with Moscow. With less vessels to spare, Russia is shipping its oil at less of a discount, eroding the incentive that originally sparked Indian interest.
In March, India imported an estimated 33.8 million barrels of Russian crude, compared to 51.1 million in January, Kpler data showed.
Aside from New Delhi, US crude is rapidly taking on global market share, especially as OPEC and Russia cut back oil production.
Just last week, Moscow ordered its companies to reduce their oil output in the second quarter, as the country targets a production level of 9 million barrels a day. It’s part of a broader OPEC+ strategy to reduce supply, in the aim of retaining price control.
But American production has not held back, and the country has become history’s biggest producer for six years in a row, the Energy Information Administration said. That’s allowed exports to balloon, with US imports into Asia hitting a record last year, Bloomberg said.
