India’s import of Russian crude oil saw a sharp 55% decline in November 2024, hitting its lowest level since June 2022. This development comes amidst evolving geopolitical tensions, sanctions, and market dynamics. Below is a detailed analysis of the key factors and implications surrounding this trend.

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Key Highlights

1. Decline in Imports:
   • India’s imports of Russian crude dropped by 55% compared to previous months.
   • This marks the lowest level in imports since June 2022.
2. China Dominates the Market:
   • China remains the largest buyer of Russian crude, accounting for 47% of Russia’s crude exports.
   • India follows, purchasing 37% of Russia’s crude.
3. Impact of Sanctions:
   • Price caps and sanctions from the U.S., G7, and EU aim to limit Russia’s funding for military activities.
   • These measures have influenced India’s import decisions and Russia’s trade strategies.
4. India’s Crude Oil Suppliers:
   • Despite the decline, Russia continues to be India’s top oil supplier, followed by Iraq and Saudi Arabia.
5. Discounted Crude:
   • Initially, price caps and discounts made Russian oil attractive, driving India’s imports to peak at nearly 40% of total oil purchases.
6. Coal Purchases:
   • Alongside crude oil, India has been importing smaller quantities of coal from Russia.
7. Financial Impact:
   • Russian revenue from crude oil exports to India dropped by 22% in November 2024.
8. Trade Adaptations by Russia:
   • Russia has utilized “shadow” tanker networks to bypass sanctions and tap into new markets.
9. Historical Revenue Loss:
   • Since the sanctions, Russia’s estimated revenue loss stands at EUR 14.6 billion.
10. India’s Refining Dependence:
    • India imports over 85% of its crude oil for refining into essential fuels like petrol and diesel.

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Key Data Table

Metric	Details
Decline in Imports	55% (Lowest since June 2022)
China’s Share of Russian Crude	47%
India’s Share of Russian Crude	37%
India’s Top Oil Suppliers	Russia, Iraq, Saudi Arabia
Revenue Drop for Russia	22% in November 2024
Historical Revenue Loss	EUR 14.6 billion
India’s Crude Oil Dependence	Over 85% imported for refining
Russia’s Trade Adaptations	Shadow tanker networks for new markets

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Implications for India

1. Energy Security:
   • The decline in imports raises questions about alternative suppliers and pricing stability.
2. Geopolitical Pressures:
   • India faces challenges balancing economic interests with global geopolitical alignments.
3. Economic Impact:
   • Reduced access to discounted oil could lead to increased costs for refining and fuel pricing domestically.
4. Long-term Strategy:
   • Diversifying energy sources and investing in renewable energy could reduce dependency on imported oil.

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The declining trend in India’s import of Russian crude underscores the interconnectedness of global energy markets and the far-reaching impact of geopolitical developments. As the situation evolves, India’s approach to energy procurement and trade partnerships will remain crucial.