India-Russia Relation / Russia becomes India's top oil supplier, will petrol become cheaper now?

India-Russia Relation: Gulf countries have become a topic of discussion these days. The reason for this is the war between Israel and Palestine. The Gulf countries are very angry due to the continuous Israeli attacks on Gaza. But the news that has come today which is troubling the Gulf countries is not from Gaza but from India. Where Russia has given a big blow to the Gulf countries. In fact, Russia has acquired 40 percent share in the Indian crude oil basket in the first 6 months of the current financial year.

The Gulf countries once had sole rule in this basket. Before the Russia-Ukraine war in 2022, the share of Gulf countries was very high and that of Russia was not even 2 percent. When sanctions were imposed on Russia and it offered cheap crude oil to the world, India took full advantage of it and rapidly Russia's share in the Indian basket became more than that of the OPEC countries.

India is the world's third largest oil importer and consumer. After Saudi Arabia's decision to extend the voluntary production cut till the end of this year, there is a possibility of further reduction in Middle East supply, due to which India can also consider other options. Now the biggest question is whether petrol will be cheaper in India? This question also arises because Russian oil has also reached close to 80 dollars. There has been no change in the prices of petrol and diesel in India since May 2022.

Double exports to India since last year

India imported an average of 1.76 million barrels per day (bpd) of Russian oil from April to September, or rather, in the first half of the financial year 2023-24. Whereas in the same period last year this import was about 780,000 barrels per day. Last month, India's imports from Russia, which had declined in July and August, rose to 1.54 million bpd, up 11.8 percent from August and 71.7 percent from a year earlier, the data showed.

Russia on top, loss to Middle East

During April to September, Russia was the top oil supplier to India, followed by Iraq and Saudi Arabia. India's imports from Iraq and Saudi Arabia fell by 12 per cent and nearly 23 per cent to 928,000 bpd and 607,500 bpd, respectively, during the April-September period, the data showed. Imports from the Middle East fell by nearly 28 per cent to 1.97 million bpd in April-September, bringing the region's share in India's total oil imports down to 44 per cent from 60 per cent in the year-ago period.

OPEC's share also reduced

According to the data, the share of oil from the Commonwealth of Independent States (CIS), which includes Azerbaijan, Kazakhstan and Russia, has almost doubled to 43 per cent, mainly due to higher purchases from Moscow. Due to less purchases from the Middle East, OPEC's share in India's total imports became the lowest in 22 years. The share of Organization of the Petroleum Exporting Countries (OPEC) members, mainly from the Middle East and Africa, fell to 46 percent in April to September, compared with about 63 percent a year earlier.

Will petrol and diesel become cheaper in India?

Crude oil prices are continuously increasing. However, compared to Gulf countries, Russian oil is currently 10 to 15 dollars cheaper per barrel. In the month of September, there was a report that India was getting crude oil from Russia at $ 80 per barrel, which was $ 20 per barrel more than the cap imposed by Western countries. If India is still getting Russian crude oil at $80, it is about 13 to 14 dollars cheaper than Brent crude oil. At present, the price of Brent crude oil has reached close to $ 94 per barrel. American oil prices are about to reach $91 per barrel.