IndianOil has been at the top of the league tables as the world’s largest buyer of discounted seaborne Russian crude oil for most of this year and it snapped up more than half a million barrels per day (bpd) in October. IOC is now far ahead of Reliance Energy which is hanging in there as the world’s second-biggest buyer of seaborne Russian crude.

Two private sector companies – Reliance Energy and Nayara – and IndianOil were quick to grab the chance of getting Russian oil which was being offered at big discounts soon after Western nations stopped buying from Moscow following its invasion of Ukraine in February 2022.

Reliance, for instance, had bought no Russian oil in February 2022 but bought 136,000 barrels per day (that’s referred to as 136 kbd in the oil industry) in March 2022.

IOC also quickly spotted the opportunities of getting discounted oil and from buying no Russian oil in February 2022 was close behind Reliance at 132kbd the next month. Nayara, which is partly owned by Russian oil giant Rosneft, also moved from buying no Russian oil to buying 81kbd in March 2022. “Pretty much, the world’s three largest seaborne buyers are Indian,” says Viktor Katona, lead crude analyst at Kpler, a data and analytics firm.

Aimed at reducing revenues for Russia’s war against Ukraine, the sanctions deal agreed a year ago included a $60-per-barrel price cap for seaborne Russian oil. That’s $24 below the average market price over the last 12 months

Indian refineries have traditionally bought their crude oil from Middle East countries like Iraq, Saudi Arabia and also Kuwait and the UAE. Sailing time between the Middle East and India is roughly around five days. Tankers bringing Russian oil to India now have an around 30-day journey.

But in the wake the Ukraine war, India has been buying more than 60 per cent of Russian seaborne oil, according to London Stock Exchange Group figures. Indian companies have been looking to benefit from discounted Russian prices to boost refinery margins. China has been another big purchaser of Russian crude.

Through 2022 Reliance and IOC gulped down ever-increasing quantities of Russian crude oil. In some months like May and June 2022 IndianOil was the bigger buyer but in July Reliance grabbed the top spot, buying 305 kbd compared to IndianOil’s 293 kbd.

In December, the pecking order changed and Reliance moved far ahead of IOC, buying 525kbd compared to IOC's 332kbd. That continued in January and February this year with Reliance upping its purchases steeply. In February Reliance bought 683kbd which was more than double IOC’s 314kbd.

In March, IOC stepped up its Russian oil purchases in a big way to 724kbd compared to Reliance’s 475kbd. IOC has moved far ahead of Reliance ever since.

Reliance runs India’s largest refinery at Jamnagar but IOC, which is a much older company, has nine refineries spread out across different parts of the company. Both IOC and Reliance were partly shut down for maintenance in September which is also when demand falls slightly.

Bharat Petroleum (BPCL) has also been a big purchaser of Russian oil though it has been far behind IOC and Reliance through most of this year.

China’s Petrochina buys more Russian crude than both the Indian refinery companies. But most of its oil travels by pipelines between the two countries. One pipeline that travels into northern China carries 600,000 barrels per day. Another pipeline goes through Kazakhstan. Says Katona: “Petrochina would be the largest buyer of Russian crude per se. But on the high seas, Indian companies rule.”

In the last month, India has stepped up crude oil purchases from Iraq but has been buying far less from Saudi Arabia.

Global oil prices have been seesawing furiously in recent months. Opec+, led by the Saudis and Russia, cut production in a bid to push up prices. In October Brent crude prices shot up to over $90 but in the last few days fell to around $70 because of fears about a global economic slowdown. Brent is treated as the global benchmark for oil prices.

India emerging as a big buyer of Russian crude oil has had a huge impact on the global market. Some analysts reckon it’s possible that the entire market could be permanently changed because of this. Also the oil tanker business has undergone huge changes because the 30-day journey to India means more tankers are needed.

The Western sanctions appear not to have had the desired impact on Russia’s oil revenues for its war chest, according to Bloomberg. Moscow’s monthly income from oil exports its greater now than before the invasion of Ukraine. The sanctions banned shipping companies from providing services like shipping and insurance to any cargoes priced above the $60/barrel limit. But Russia has managed to assemble “shadow fleets” of its own and moved export flows to countries like India, which didn’t join the price cap.