India's Russian oil imports recovered in March, returning to near usual levels after a 3-month decline, as non-sanctioned vessels were delivering cargoes, while some supplies were diverted from Turkey, according to five trade sources and shipping data.
The recovery of Russian oil flow to the world's third-largest oil importer and consumer is easing a supply crunch and cooling prices for rival Middle East grades.
Russian oil supplies to India and China fell sharply earlier this year following U.S. sanctions on January 10 that targeted producers, insurers, ships and middlemen to curtail Moscow's oil revenue.
In March, India's imports of Russian oil, mainly Urals crude, are back at 1.54 million barrels per day (bpd), after falling to 1.1 million to 1.2 million bpd in the previous three months due to concerns about sanctions, data from analytics firm Kpler showed.
Freight rates for tankers on a one-way trip from Russian western ports to India hit a 12-month high of $8 million, attracting more ships to provide service while also squeezing Russian oil sellers' revenues, the sources said.
A decision by Turkey's largest oil refiner Tupras to halt Russian oil imports also freed up more supplies for Asian markets, they added.
Turkey's Russian oil imports fell to 127,000 bpd so far in March from about 300,000 bpd before the January sanctions hit, Kpler data showed.
Discounts for Russian oil have narrowed to between $2.60 to $2.80 per barrel to dated Brent for cargoes loading in March for April delivery to Indian ports compared with about $2.50-$3 per barrel in the previous month, the sources said.
Some traders have told Indian refiners they would use western ships to deliver cargoes to avoid risking sanctions, the sources said.
Another source said that in recent weeks the price of Urals oil has fallen below $60 per barrel price cap set by the Group of Seven nations, allowing access to western shipping services.
India, the No. 2 importer of crude from Russia, has said it would buy Russian oil only if it is supplied by companies and ships that have not been sanctioned by the United States.
India became the biggest buyer of Russian seaborne oil sold at a discount after Western nations imposed sanctions on Moscow following its 2022 invasion of Ukraine in 2022.
India follows United Nations sanctions, rather than those of individual countries, but fears of secondary sanctions by the United States create operational challenges as Indian banks and companies have significant exposure to the U.S. financial system.
