India Boosts Far East Russian Oil Imports Amid Global Trade Disruptions

India's imports of Russia's Far East ESPO blend oil have increased by 6% in the first seven months of this year, according to a report by Argus. This rise is largely due to China backing out of the spot market and Indian refiners taking advantage of higher supply from Russia. China remains the largest buyer of ESPO crude, but its share has fallen to 83% from 88% in the same period last year. India's share, on the other hand, has increased to 12%.

Dmitry Prokofiev, director of external communications at NEFT Research, attributes the rise in Indian ESPO imports to logistics reasons and China's pullback between April and June. He notes that while ESPO is a key feedstock for China's independent refiners due to its high quality and short delivery times, Indian refiners view it as a backup option due to higher costs and longer delivery times compared to the Urals blend from Russia.

The increase in Indian ESPO imports is not a replacement of Chinese demand but rather filling volumes that Chinese refiners would not buy due to reduced total crude oil imports. However, India's intake of Russian oil has eased in August from July's record high, as Ukrainian attacks on Russian export infrastructure and competition from China for Russia's barrels have dented Indian intake.