Published by Global Banking and Finance Review
Posted on March 20, 2025
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By Mohi Narayan
NEW DELHI (Reuters) - Russia has surpassed the United Arab Emirates as India's top naphtha supplier in the year to March 2025, as refiners capitalise on discounted cargoes, preliminary ship-tracking data showed, a trend buyers expect to persist for another year.
India, the world's third largest crude importer and oil consumer, has been relying on cheap oil from Russia to reduce import costs despite Western efforts to curtail Moscow's revenues during the Ukraine war. Russia has been India's top crude supplier for the past two years.
India imported about 3 million tons (74,000 barrels per day) of naphtha from April 2024 to March 2025, with Russia supplying more than half, up from just 14%-16% of the total in the previous year, ship-tracking data from OilX and Kpler showed.
Russian naphtha from Ust-Luga, Sheskharis and Novorossiysk ports arrived at the western Indian ports of Mundra, Hazira, and Sikka, ship-tracking data showed, for petrochemical plants of HPCL Mittal Energy Ltd (HMEL) and Reliance Industries.
"We will buy from wherever it is cheaper," HMEL's Chairman Prabh Das told Reuters on Wednesday at an industry gathering, without commenting on its Russian oil purchases. RIL did not respond to a request for comment.
Russian naphtha was $14-$15 per ton cheaper than Middle Eastern product as of this week, two trade sources said.
India ranks only seventh among Asian naphtha importers, Kpler data showed, but imports will rise due to growing domestic petrochemicals demand and upcoming crackers in the next 3-4 years.
Meanwhile, the UAE's share, mainly from Abu Dhabi National Oil Co, dropped to just over 20%, nearly half of its level in the same period, the data showed.
"Prices have been attractive for us and we will continue to purchase from them (Russia)," a source at an integrated refining complex in northern India said, adding that margins in Indian market are lower than their expectation so far this year, so refiners will prefer cheaper feedstock.
Russia diverted naphtha exports to Asia after Europe banned Russian oil imports over the 2022 Ukraine invasion.
The Trump administration is working on a Ukraine ceasefire deal which could lead to the lifting sanctions on Russian oil, analysts said.
However, Asian countries may remain as Russia's top oil buyers as Europe may still avoid Russian imports even if U.S. sanctions are lifted, Rystad Energy analyst Jorge Leon said.
Indian naphtha imports (Unit: 1,000 metric tons)
OilX Kpler
2023-24 2024-25 2023-24 2024-25
UAE 1276.81 679.13 1182 764.43
Qatar 636.13 267 614.6 264.3
Russia 431.6 1705.88 504.5 1738.2
Others 719.75 343.35 761.2 307.07
Total 3064.29 2995.36 3062.3 3074
(Reporting by Mohi Narayan; Additional reporting by Natalia Chumakova; Editing by Florence and Michael Perry)
