- India is buying more U.S. crude as it withdraws from trade with Russia, Bloomberg reported.
- US barrel shipments are at their highest since May of last year.
- Russian imports have suffered from Western sanctions that have reduced Moscow’s ability to ship crude.
American barrels are flowing into the Indian market, driven by a shift in demand caused by Washington.
Indeed, Western sanctions against Moscow have broken New Delhi’s appetite for Russian crude, pushing India to turn to American exports.
An estimated 7.6 million U.S. barrels were shipped to India in March, marking the highest level since May last year, according to Kpler data cited by Bloomberg. This is an impressive increase from the start of the year, when India imported just 3 million barrels from the US in January.
At the same time, Indian purchases of Russian oil have fallen, as the United States and its allies have stepped up enforcement of sanctions against Moscow.
For example, Washington has started to individually sanction entities that do not respect the price ceiling set by Western countries on Russian barrels, and has targeted more than 50 vessels since October. Russian oil group Sovcomflot is also being singled out, and Indian refineries have since stopped accepting cargoes transported by the company’s vessels.
Although India partly restricts trade with Russia for fear of secondary sanctions, tighter U.S. surveillance also reduces the benefits of dealing with Moscow. With fewer ships in reserve, Russia is shipping its oil more cheaply, eroding the incentive that initially sparked India’s interest.
In March, India imported about 33.8 million barrels of Russian crude, compared to 51.1 million in January, according to Kpler data.
Aside from New Delhi, American crude is rapidly gaining global market share, especially as OPEC and Russia reduce their oil production.
Last week, Moscow ordered its companies to cut oil production in the second quarter, with the country targeting an output level of 9 million barrels per day. This is part of a broader OPEC+ strategy to reduce supply, with the aim of maintaining price control.
But U.S. production hasn’t slowed and the country has become the largest producer in history for six straight years, the Energy Information Administration said. That has allowed exports to soar, with U.S. imports to Asia hitting a record last year, Bloomberg said.
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