It isn’t hard to understand why Russia took part in the $13 billion acquisition of an Indian refinery last year. In just seven months, Indian refiners have processed four times more Russian crude than they did in the whole of the previous fiscal year. The record crude purchase, mostly of Urals grade, shows how Russia is growing competition to the Middle East’s grip in the world’s fastest-growing oil market. Russia is now the 11th biggest exporter to India, overtaking Qatar and up from 21st place last year.
“Urals is becoming more and more favorable for Indian refiners because of its competitiveness to Middle Eastern crudes,” said R. Ramachandran, refineries head of state-run Bharat Petroleum Corp., which resumed purchases of the Russian grade after a three-year gap. Indian refiners purchased 2.5 million tons of Russian oil during April-October, compared with 600,000 tons bought during the 12 months ended March 31, according to data provided by Indian Oil Minister Dharmendra Pradhan in parliament this week. India, which imports more than 80 percent of its crude requirements, still gets close to two-thirds of supplies from the region led by Iraq and Saudi Arabia.
“There’ll be good demand for Urals going ahead, as it will be a good fit in new refining capacities such as Kochi and Paradip,” Ramachandran said. Indian refiners have also purchased other Russian grades such as ESPO, Sokol and Sakhalin Blend.