India’s crude oil imports from Russia plunge on payment issues

India’s crude oil imports from its largest supplier Russia plunged in December to their lowest since January 2023, as six tankers carrying Sokol grade oil could not deliver due to payment issues amid tightening sanctions, according to data intelligence company Kpler.

After rising to an all time record of 2.15 million barrels a day in May, oil imports from Russia fluctuated downwards, experiencing a sharp decline between November and December to 1.48 million barrels a day last month, according to Kpler data.

Indian refiners, which bought an average 140,000 barrels a day of Sokol in 2023, couldn’t receive any such cargoes last month. Sakhalin-1 LLC, which extracts crude from Russia’s Far East, has not been able to open a bank account in the United Arab Emirates to enable buyers to pay in dirham as agreed, Viktor Katona, lead crude analyst with Kpler, said in an email on Sunday. 

Of the six tankers left idle around India’s coast, two indicated they may reroute to China, he said. Despite roadblocks, Sokol grade oil trade between Russia and India looks likely to continue, with three additional ship-to-ship transfer operations of Sokol cargoes and three new cargoes — NS Antarctic, Jaguar, Vostochny Prospect — now indicating India as their final destination, he said. 

For the full year 2023, India’s oil imports from Russia more than doubled on year to 1.79 million barrels a day, while those from the second biggest supplier Iraq contracted 11% to 908,000 barrels a day, according to Kpler data.