Key facts
- India's imports of Russian ESPO crude blend rose in January-July.
- China's share of ESPO shipments from Kozmino fell to 83% from 88%.
- India's share of ESPO exports increased to 16% from 12% in the same period.
- Supply disruptions in the Middle East and China's reduced spot market activity influenced India's purchasing decisions.
- India's overall crude oil imports from Russia may have decreased in August compared to July.
India has significantly increased its imports of Russia's Far East ESPO crude blend during the first seven months of the year, a move driven by disruptions in traditional trade routes and shifts in major buyers' purchasing patterns. Total exports of the ESPO grade from Russia’s Far Eastern port of Kozmino rose by 6% in January-July compared to the previous year, according to a report by Argus. While China remains the primary buyer, its share of these shipments fell to 83% from 88%. Concurrently, India's participation in ESPO exports grew to 16% from 12% in the same period, based on data from Vortexa and Kpler.
This surge in Indian imports is linked to a slump in Chinese oil purchases between May and June, coupled with supply disruptions in the Middle East that delayed expected term cargoes for Indian refiners. Dmitry Prokofiev, director of external communications at NEFT Research, noted that India's ESPO imports rise when China retreats from the spot market or when supply issues arise. He added that ESPO is a key feedstock for China's independent refiners due to its quality and short delivery times. Indian refiners, however, view ESPO as a secondary option, with higher costs and delivery times compared to their preferred Urals blend. Analysts suggest India is acquiring volumes that Chinese refiners are not buying, rather than directly taking market share from China. Despite the increase in ESPO imports, India's overall crude oil imports from Russia may have eased in August from July's record high, potentially due to Ukrainian attacks on Russian export infrastructure and competition from China for Russian barrels.