India plans large-scale LNG purchases from the US by 2027

The US and European countries are simultaneously threatening to introduce tariffs and economic sanctions against other states purchasing Russian oil, while they themselves continue to use petroleum products derived from Russian crude. Specifically, the US warned about the possibility of applying up to 100% tariffs to countries acquiring oil from Russia.

In July of this year, India purchased a record 5.5 billion euros worth of crude oil from Russia. This marks the second consecutive month that crude oil imports from Russia have reached record levels.

According to data, supplies of Russian crude oil increased to approximately 2.8 million barrels per day in July, accounting for about 55.5 percent of India's total crude oil imports. The Center for Energy and Clean Air Research (CREA) reported that ports in India, Turkey, Brunei, and Georgia exported petroleum products totaling 633 million euros in July. Of these amounts, 214 million euros went to the European Union, 184 million euros to Australia, and 234 million euros to the US. It is estimated that about 284 million euros of these refined products were made from Russian crude oil.

Five batches containing petroleum products produced using Russian crude oil arrived at European Union ports in July. This occurred against the backdrop of the EU's embargo on the import of certain petroleum products from Russian crude taking effect on January 21. Furthermore, petroleum products were shipped from the Jamnagar refinery to the US. CREA notes that three months prior to July, about 35 percent of the feedstock at the Jamnagar refinery was Russian crude oil.

The sharp increase in Indian purchases of Russian oil began after the start of the war in Ukraine in February 2022. Due to restrictions imposed by Western countries, European buyers abandoned Russian oil, allowing Moscow to offer crude oil to other Asian and Indian refiners at attractive prices. In July, most of the increased purchases of Russian crude oil came through smaller terminals rather than major ports. Imports of Russian oil to the HMEL company's Mundra terminal rose by 58 percent compared to June, and the Wadi Nar terminal of Indian Oil recorded a 35 percent increase. Imports of Russian crude oil through Mumbai also increased by 37 percent.

Despite the overall growth, an increase in supplies was not observed at all major terminals. For example, in Jamnagar, one of the world's largest oil refining complexes, Russian oil supplies remained at June levels. Meanwhile, imports through Paradip decreased by 22 percent. Nevertheless, the growth in purchases through other terminals allowed the overall import to reach a record level.

Before 2021, Russia accounted for only 2.5 percent of India's imports, whereas in 2021, India received less than 100,000 barrels of crude oil per day from Russia, according to data from the U.S. Energy Information Administration (EIA). The situation changed drastically after the start of the war in Ukraine. In 2022, Russian oil supplies rose to approximately 740 thousand barrels per day, and in 2023, to 1.8 million barrels per day. As a result, Russia became the largest supplier of crude oil to India, capturing a share of about 39 percent.