India imports record 1.7 m b/d of Russian crude in November: S&P Global

“Russia’s seaborne crude exports were little changed in November at just over 3 million b/d after flows to India surged to a record high, absorbing barrels displaced from Europe where imports sank to all-time lows ahead of the EU’s Dec. 5 import ban and G7 price cap,” according to tanker tracking data.

“While Russian crude flows to the EU slumped 308,000 b/d to average a record low of 464,000 b/d in the month (November 2022), Indian refiners stepped up their buying of Russian oil by 272,000 b/d to a record 1.17 million b/d,” the report said.

Seaborne exports of Russian crude averaged 3.07 million b/d in November, according to S&P Global Commodities at Sea data, down from 3.09 million b/d in October and just below the pre-war average of 3.1 million b/d in January and February.

While Russian crude flows to the EU slumped 308,000 b/d to average a record low of 464,000 b/d in the month, Indian refiners stepped up their buying of Russian oil by 272,000 b/d to a record 1.17 million b/d.

With Russian crude flows to China little changed from recent levels at 918,000 b/d, together with India, the two energy-hungry Asian importers accounted for 68% of seaborne Russian crude exports in November, the data showed, up from 58% in the previous month.

Turkey, now Russia’s third-biggest crude buyer as local refiners switch to cheap Russian crude, saw imports from Russia slip 35% on the month to 224,000 b/d, the data showed. Before Russia’s invasion of Ukraine, Turkey’s five refineries were importing around 130,000 b/d of Russian crude.

The data came days after the G7 set its price cap on Russian crude at $60/b and the EU’s own embargo on seaborne Russian crude came into effect early December 5. The price cap and EU embargo will extend to Russian product exports from February 5.

The November data also showed Russian crude exports headed for South Korea jumped to 144,000 b/d, the highest since May. South Korea, which imported 275,000 b/d of Russian crude in 2021, has backed Western oil sanctions on Russia but its offshore waters are often used for ship-to-ship transfers of Russian crude with onward transport to Southeast Asia.

Analysts at S&P Global estimate that some 2 million b/d of Russian crude and products to Europe will ultimately need to find new buyers when the EU’s full oil sanctions on Moscow take effect February 5, 2023.

S&P Global estimates that about half of the 2 million b/d displaced from Europe will likely find new buyers in Asia although uncertainty over the available “shadow” tanker fleet able and willing to sidestep the G7’s price cap measures made forecasts difficult.

“Concurrent restrictions on G7 insurance and financing, a delayed rollout of the price cap, and Russia’s aversion to selling into Western policy constraints will combine to create an initial shortage of ships and buyers required to re-route roughly half of the 2 million b/d,” S&P Global’s chief geopolitical risk advisor said in a note.

Overall, S&P Global analysts forecast that initial dislocations will lower Russian crude and condensate output by 1 million b/d between November and March, to 1.5 million b/d below pre-conflict levels.