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Russia’s cheap crude sends OPEC’s market share in India to a record low

Oil exportsRussia has rerouted its oil exports away from Europe towards Asia.

Suriyapong Thongsawang/Getty Images

  • India’s imports of crude oil from OPEC dropped to an all-time low of 46% in April, down from 72% a year ago.
  • Russia accounts for 36% of India’s oil imports, versus less than 1% before Moscow launched its war on Ukraine.
  • Imports from Russia have surpassed the combined purchases from Iraq and Saudi Arabia.

The Organization of the Petroleum Exporting Countries has seen its market share in India shrink to a record low amid a flood of cheap Russian oil imports.

The cartel’s share dropped to 46% in April, down from 72% a year earlier, according to Vortexa data cited by the Economic Times

Russia is partners with the oil cartel under the OPEC+ coalition, but India has been taking advantage of cheap barrels since Vladimir Putin ordered the invasion of Ukraine.

Russia now accounts for 36% of the country’s imported supplies, or about 1.67 million barrels per day. Before the war started, that stood at less than 1%.

Meanwhile, OPEC supplied 2.1 million barrels per day to India last month out of the total 4.6 million barrels per day the country took in, per Vortexa.

Total Russian imports have now surpassed the combined purchases from Iraq and Saudi Arabia, which have been India’s biggest suppliers over the last decade.

The data show, too, that while India’s month-on-month purchases set a new record high again in April, the rate of increase slowed, which could suggest it’s peaking soon.

Western sanctions on Russian energy — such as bans on coal in August 2022, crude oil in December 2022, and refined oil products in February 2023 — have forced the Kremlin over the last year to seek out alternative markets for their energy supplies in Asia. 

European Central Bank calculations show that trade volume between the euro area and Russia halved since February last year.

Yet in April, Russia’s oil exports returned to pre-war levels, as China and India now account for about 90% of its shipments, Kpler data shows.

Still, Russia is making less money from its energy exports compared to before its invasion, as sanctions weigh on prices. The International Monetary Fund said in April that Moscow’s revenues remain roughly 43% lower than the same time last year.

Read the original article on Business Insider