How India’s imports of Russian oil have lubricated global markets

In February america slapped new sanctions on Sovcomflot, a Russian state-owned shipping firm responsible for carrying around 15% of Russian oil exports to India. Almost immediately, Indian importers stopped taking shipments from Sovcomflot tankers. But that did little to stem the flow of Russian crude to India, the world’s third-biggest consumer of oil. Deliveries increased by 6% in March, compared with February. Exporters arranged alternative transport to India—probably through the shadow fleet that helps them bypass sanctions. India has also bought Russian crude at prices below the $60-per-barrel price cap imposed by the West. Taken together, these purchases have helped make India the second-biggest importer of Russian oil, behind China.

The immediate impact has been to help India to meet demand at a lower cost. In 2023 nearly 90% of India’s oil consumption was sourced from abroad. Roughly 34% of those imports came from Russia. The discount on Russian crude has narrowed over time, from 20% at the start of last year to around 5% in December, but it still yields significant savings on India’s oil imports, which were worth $181bn last year, around 27% of the country’s total import bill.