Recent data from vessel tracking agencies has revealed a significant shift in India's oil import patterns. In December, India saw a notable increase in its imports of Saudi Arabian oil, while its purchases of Russian oil plummeted to an 11-month low. This decline prompted Indian Oil Corp (IOC) to source alternatives from the Middle East due to payment issues affecting its Russian oil acquisitions.

IOC, the leading refiner in India, usually procures the Sokol variant of Russian oil under an annual agreement with Rosneft, the Russian oil major. However, facing difficulties in obtaining the expected supply, IOC had to resort to sourcing from the Middle East to cover the shortfall, according to insider sources revealed to Reuters last month.

Analysis based on data from flow tracking agencies Vortexa, Kpler, and LSEG indicated a substantial drop in India's oil imports from Russia, estimated to be between 16% and 22% in December. In contrast, imports of Saudi oil showed an increase of approximately 4% during the same period, according to data from Kpler and Vortexa.

While the monthly import data suggested a significant decline in India's purchases of Russian oil, some industry experts remain cautious about prematurely dismissing India's interest in the Sokol grade. Viktor Katona, lead crude analyst at Kpler, highlighted that despite the decrease, three new Sokol cargoes en route to India indicate a potential continued interest in this particular grade.

Recent ship tracking data from Kpler and LSEG identified several vessels, including Aframax ships NS Century, NS Commander, Sakhalin Island, Lityny Prospect, and Krymsk, along with a very large crude carrier Nellis transporting Russian Sokol oil intended for IOC. Among these vessels, the NS Century, previously facing US sanctions for pricing Russian oil above the G7's set cap of $60 a barrel, has been floating near Colombo. Analysts suggest China might serve as the final destination for some of these shipments due to prevailing circumstances.

The evolving dynamics in India's oil imports, particularly the shift from Russian to Saudi oil, underscore the ongoing challenges and fluctuations in the global oil market, reflecting the intricate balance of geopolitical and economic factors at play.

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