Refiners in India have started tapping Russian oil aboard vessels floating off the country's coast to make up for the loss of Middle Eastern crude due to the Iran war, two sources with direct knowledge of the matter said on Thursday.
India is vulnerable to energy supply shocks, with crude stocks covering only about 25 days of demand. India was the top buyer of Russian seaborne crude after Moscow's 2022 Ukraine invasion, but in January its refiners started to reduce purchases, helping New Delhi avoid 25 per cent tariffs imposed by Washington and clinch an interim trade deal.
On Thursday, the Suezmax tanker Odune carrying about a million barrels of Russian oil berthed at eastern Paradip port for delivery to state refiner Indian Oil Corporation (IOC), according to a shipping source. The vessel had been floating in Indian waters, the person said.
IOC is also scheduled to receive about 700,000 barrels of Russian oil loaded on the Spring Fortune at Vadinar port in western India on Saturday, the source said.
A source at Indian Oil said his company is expediting purchases of Russian oil, including that loaded on vessels floating around India.
Indian Oil did not immediately respond to a request for comment. About 9.5 million barrels of Russian crude is floating near Indian waters and able to arrive within weeks, an industry source with direct knowledge of Russian trade told Reuters.
A source at another Indian refiner said his firm was also considering buying Russian oil floating near India.
"Should Middle Eastern inflows tighten, Indian refiners could pivot back toward Russian grades relatively quickly," said Sumit Ritolia, analyst at ship-tracking firm Kpler.
Kpler tracking shows about 30 million barrels of Russian oil available and loaded on vessels in the Indian Ocean, Arabian Sea region and Singapore Strait, including volumes in floating storage, he said.
"Some of these vessels have not yet declared their destination ... If Indian refiners won't act, all these can start moving to China in a day or two," Ritolia said.
(Reporting by Nidhi Verma; Editing by Kirsten Donovan)
