Russian Oil tankers Divert from India to China, offers crude oil at discounted rate to Beijing

In January, China’s seaborne crude oil imports from Russia rose to a record 1.7 million barrels per day, according to data from Kpler.

New Delhi: The India-US trade deal has created roadblocks on imports of Russian oil. As per the deal, the United States has lifted 25 percentage points of the 50 percent tariffs imposed on India only on the condition that New Delhi stop purchasing crude oil from Russia. The Modi government will now have to purchase oil from the US and Venezuela. According to the reports, India has significantly reduced its purchases of Russian oil, while Russia is now selling more oil to China. Russia has reportedly further cut oil prices and has also offered China oil at cheaper rates after the India-US trade deal.

News agency Reuters has reported that the discounts on Russian oil exports to China have increased sharply this week. Oil sellers are lowering prices to boost demand from China, the world’s largest crude oil buyer. This is being done to compensate for a potential drop in sales to India. If India stops buying Russian oil, China will remain the only major buyer of cheap Russian crude. It is important to note that Russia is already struggling with declining demand from India due to Western sanctions.

Here are some of the key details:

The oil trade between Russia and China emerged strongest in the month of January
In January, China’s seaborne crude oil imports from Russia rose to a record 1.7 million barrels per day, according to data from Kpler.
China imported 1.64 million barrels per day of Russian oil in January, the highest level since March 2024.
Russia shipped 18.6 million barrels per day (bpd) of oil to China via sea routes in January, according to a report by OilPrice.com.
JPMorgan analysts (including Natasha Kaneva) wrote that China’s independent refiners are benefiting the most from this situation.
Taking advantage of deep discounts and supportive domestic policies, China is buying most of the oil coming from Russia.
This is boosting their profits, increasing output, and strengthening strategic reserves.

Will India stop imports?

JPMorgan analysts (including Natasha Kaneva) are of the opinion that even after the trade deal with the US, India will continue to buy 800,000 to 1 million barrels of Russian crude oil per day. This would account for 17 percent to 21% of India’s total crude oil imports.

Last June, India was buying around 2 million barrels of oil per day from Russia. According to Kpler data, in January India’s imports of Russian oil fell to 1.1 million barrels per day, the lowest level since November 2022.

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