India imported a record 1.7 m b/d of Russian crude oil in November reports S&P Global

Russian crude oil: According to S&P Global Commodity Insights, India purchased 1.7 million barrels of crude oil per day (b/d) from Russia in November, with inbound shipments jumping to a record high ahead of the G7 price cap and the European Union's (EU) import embargo on December 5.
“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," based on tanker tracking information.
“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," added the study.

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What do statistics reveal?

According to data from S&P Global Commodities at Sea, seaborne shipments of Russian oil decreased to an average of 3.07 million barrels per day (b/d) in November from 3.09 million in October and fell just short of the pre-war average of 3.1 million b/d in January and February.

While Russian crude exports to the EU fell by 308,000 barrels per day to an average of 464,000 barrels per day in the month, Indian refiners increased their purchases of Russian oil by 272,000 barrels per day to a record 1.17 million barrels per day.

The data indicated that India and China, two energy-hungry Asian importers, accounted for 68% of seaborne Russian oil exports in November, up from 58% in last month, with Russian crude flows to China remaining relatively stable at recent levels at 918,000 b/d.

As domestic refiners switch to inexpensive Russian oil, Turkey, now the third-largest customer of Russian crude, saw imports from Russia fall 35% on the month to 224,000 b/d, according to the data. Turkey's five refineries were buying about 130,000 b/d of Russian crude before Russia invaded Ukraine.

The information was released days after the G7 set a $60/b cap on the price of Russian crude and the EU imposed its own embargo on the import of Russian petroleum at the beginning of December 5. Beginning on February 5, the EU ban and price cap will also apply to exports of Russian goods.
According to the November figures, Russian crude exports to South Korea increased to 144,000 b/d, the highest level since May.

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Transportations of Russian crude to Southeast Asia

Despite supporting Western oil sanctions against Russia, South Korea, which purchased 275,000 b/d of Russian petroleum in 2021, has seen a lot of ship-to-ship transfers of Russian crude to Southeast Asia.
When the EU's comprehensive oil sanctions against Moscow go into effect on February 5, 2023, analysts at S&P Global estimate that about 2 million b/d of Russian crude and products to Europe will ultimately need to find new consumers.

S&P Global predicts that roughly half of the 2 million b/d displaced from Europe will likely find new consumers in Asia, despite forecasting being challenging due to uncertainties regarding the "shadow" tanker fleet that is able and willing to avoid the G7's price cap restrictions.

S&P Global’s chief geopolitical risk advisor said in a note, “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."

Overall, according to S&P Global analysts, first disruptions will result in a 1 million b/d decrease in Russian oil and condensate production between November and March, or 1.5 million b/d below pre-conflict levels.

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