Even after Russia’s ‘deep discounts,’ India just saved only $2 per barrel

It was estimated that during the past nine months, India, the third-largest consumer of crude oil in the world, was able to lower its average landed price of imported crude from Russia by around $2 per barrel as a result of the cheaper Russian oil prices.

It has been estimated that the ramp-up by India in its purchases of discounted Russian crude oil a year ago in response to Moscow’s invasion of Ukraine has resulted in an estimated savings of about $ 2.5 billion for the first three quarters of the current fiscal year, according to an analysis of Indian trade data for the period. However, despite reports of Russia offering deep discounts, the savings for India are much lower than expected. Excluding Russian barrels from the calculation, the average price rises to $101.2 per Barrel.

India, the world’s third-biggest consumer of crude oil, saw its average landed price of imported crude oil fall by just about $2 per barrel during the nine-month period due to cheaper Russian oil. For April-December, imported crude averaged $99.2 per barrel. When Russian barrels are excluded from the calculations, the price rises marginally to $101.2 per barrel if they are not included in the calculation.

For the period under consideration, India’s oil imports totaled $126.51 billion, which is a substantial increase from the previous year. Based on the analysis, it appears that the Indian oil import bill would have been almost $129 billion, or around 2 percent higher, if Indian refiners had paid the average price for Russian oil that they paid for crude from other suppliers.

  • During this period, almost $22 billion worth of oil was imported from Russia.
  • During April-December, the average landed price of Russian crude for India was $90.9 per barrel, which was about $10.3 less than the average price of non-Russian crude. 
  • Accordingly, on average, crude imports from other countries will be discounted by 10.1%. 

The discount is substantial, but is much lower than the claims made in various Indian and international reports.

Russian oil is believed to have a higher freight and insurance cost than other traditional suppliers, according to industry insiders. Moreover, according to reports, freight and insurance costs for ferrying Russian oil have significantly increased due to Western sanctions. Consequently, even though there might have been deeper discounts on the price of oil, the discount on the landed price-which includes freight and insurance costs-would have worked out to be lower as compared with the price of oil.

A report by Reuters, citing Goldman Sachs, had earlier in February reported that Asian buyers may have paid more for Russian crude than the quoted prices suggest, based on information from Goldman Sachs. The resilience of Russian oil production is possibly explained in part by the fact that the effectual price paid for Russian oil emerges to be remarkably higher than the quoted price assessments, Goldman Sachs wrote in a note cited by Reuters on February 10. 



Refiners in India began snapping up discounted Russian crude, annoying much of the West, which desired to discourage the sale of Russian oil to limit Moscow’s ability to fund in their Defence Budget.

As one of the highest importers of crude oil, India says it’ll buy from anywhere it can get a good deal.

Hardeep Singh Puri, the Minister of Petroleum, has recently stated that India will do everything in its power to secure oil supplies at reasonable prices by playing the market card. Over 85 percent of India’s crude oil needs are imported, making it the world’s third largest consumer of crude oil. Over the course of April-December, the effective discount on Russian crude varied significantly from month to month. 

The discount was the lowest in April based on the average price of crude imported from other parts of the world in those months, and the highest in May based on the average price of crude imported from other parts of the world. Approximately 0.6 percent to almost 14 percent of the discount was in percentage terms.

In April-December, Russia supplied close to 19 percent of India’s oil imports, totaling 173.93 million tonnes, or 1.27 billion barrels. In the past few months, Russia has moved from being a marginal supplier of crude oil to India to being the second-largest supplier of crude oil to India, after the United Arab Emirates and Saudi Arabia. As a matter of fact, Russia was India’s top oil supplier during September and December of last year.

The government releases trade data by commodity and country with a lag. For example, in March, data up to January will be available, However, The Data for the current financial year is currently only available for the first nine months.

Crude oil prices vary considerably depending on the grade of oil and can vary significantly from one grade to another. Therefore, the average landed price of crude and the total number of imports from each supplying country in April-December were used as a proxy for grade-by-grade import data since no grade-by-grade import data was available.

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