India Is Buying Oil From Middle East, Africa And US - Here's Why

Amid the fresh sanction warnings from US on Russia, Indian oil refiners are exploring all available options to replace Russian oil supplies, for a continuous flow of crude oil. According to a report by Bloomberg, the companies are re-establishing the relation with the spot market as well as negotiating long-term contracts with Middle Eastern producers.

State-Owned Refineries Turn to Spot Market and Middle Eastern Suppliers

In recent weeks, state-owned refineries have issued a raft of spot tenders to secure oil from diverse avenues, including the Middle East, Africa, and the US. Some consignments are expected to load as soon as February, underscoring the urgency of replacing the Russian crude that India has heavily relied on so far.

However, this scrambling to secure alternative option for oil, stands in contrasts with confidence expressed by some senior government officials, who have repeatedly stated that Russian crude will continue to flow once Moscow adapts its "dark fleet" and circumvents the new sanctions. According to reports, refiners’ concerns about facing punitive measures could leave India struggling to replace up to 1.8 million barrels per day of Russian crude, which accounts for a third of the country’s total oil imports.
 

Tense Negotiations Ahead as Indian Refiners Rebuild Relationships with OPEC Producers

“Indian companies have already initiated talks with Saudi Arabia and Abu Dhabi. However, refiners may face a tense negotiations as they prioritized discounted Russian oil in the last two years,” the report said. Rebuilding relationships with long-term suppliers and rerouting cargoes will also take time. Saudi Aramco is already in discussions with Indian refiners for oil supplies for the 2025-2026 financial year, while Adnoc has been approached by at least one state-owned refiner for more cargoes.

Russia Surpasses Iraq and Saudi Arabia as India’s Top Oil Supplier

According to analytics firm Kpler, “Last year, Russia became India’s largest oil supplier by volume, surpassing Iraq and Saudi Arabia." This is a significant shift from 2021, when Iraq, Saudi Arabia, and the UAE were the main suppliers, and Russian oil imports were almost zero.