In a significant shift in global oil dynamics, India has surpassed China to become the world's largest importer of Russian oil as of July 2023.

Russian crude accounted for a record 44% of India's total oil imports during this month, translating to 2.07 million barrels per day.

This increase in Russian oil imports has redirected ESPO Blend crude from traditional Chinese buyers to the Indian market, with imports rising to 188,000 barrels per day.

Indian refiners have capitalized on discounted Russian oil, a consequence of Western sanctions imposed following Russia's invasion of Ukraine.

Since the onset of the Ukraine war in February 2022, India's trade with Russia has expanded, particularly in oil and fertilizer imports.

An Indian refining source has indicated that demand for Russian oil is likely to continue rising unless further sanctions are enacted.

In July, India's crude imports from the Middle East also saw a 4% increase, raising the region's share in India's overall oil mix from 38% in June to 40%.

Iraq remained India's second-largest oil supplier in July, followed by Saudi Arabia and the United Arab Emirates.

In contrast, China's oil imports from Russia fell to 1.76 million barrels per day in July, attributed to lower profit margins for Chinese refiners.

Northeast Chinese refiners, who are typically the largest buyers of ESPO, have reduced their demand due to weak fuel consumption.

Overall, the figure for Russian oil imports represents a 4.2% increase from June and a notable 12% increase from the same month last year.