India Boosts Russian Oil and Coal Imports Amid Iran Conflict Disruptions
Russian crude shipments to India set to hit record levels as refiners seek stable energy supplies
India has significantly increased imports of Russian crude oil and coal as it seeks to secure energy supplies amid disruptions and price volatility triggered by the Iran conflict.
According to data compiled by commodity analytics firm Kpler, India's imports of Russian crude are expected to rise to a record 2.55 million barrels per day (bpd) in June, up from 2.13 million bpd in May. Russian oil is projected to account for nearly half of India's total crude imports of 5.29 million bpd this month, a sharp increase from an average share of 23 per cent in the three months before the conflict began.
The surge comes after supply concerns intensified following the conflict involving Iran, Israel and the United States. India turned to discounted Russian crude after disruptions in Middle East supplies and rising prices prompted refiners to seek alternative sources.
At the same time, imports from traditional suppliers have declined. Imports from Saudi Arabia are estimated at 349,000 bpd in June, significantly lower than the average 832,000 bpd recorded in the three months before the conflict.
India has also increased purchases of Russian coal. Imports are expected to reach 3.16 million tonnes in June, following 3.27 million tonnes in May, making Russia the country's second-largest coal supplier after Indonesia and ahead of Australia.
Russian metallurgical coal, used in steel production, has also gained importance. India imported 2.02 million tonnes of Russian metallurgical coal in May, well above the pre-conflict average. Total metallurgical coal imports reached a record 8.05 million tonnes during the month, reflecting strong demand from the country's expanding steel sector.
India's steel production is expected to rise substantially in the coming years, with annual output targeted to grow from around 168 million tonnes to 400 million tonnes by 2035. Industry estimates suggest that about 25 million tonnes of new steelmaking capacity will be added this year alone.
While India has abundant reserves of thermal coal used for power generation, domestic production of metallurgical coal remains limited and of lower quality compared to imports. As a result, the country is expected to continue diversifying its sourcing of metallurgical coal from suppliers including Russia, Australia, the United States and Mozambique.
Analysts believe Russia will remain a key energy supplier for India in both crude oil and coal. However, future crude imports may depend on the stance of the United States regarding sanctions on Russian oil and the willingness of Indian refiners to return to Middle Eastern supplies as regional tensions ease.
