Has India reached peak Russian oil?

India is hoovering up discounted Russian oil that’s been shunned by Western buyers. But there’s speculation this spree might be maxing out.

India gets nearly all its oil from abroad. And traditionally only around 1% has come from Russia, or around 43,000 barrels per day (bpd). But post-invasion, India now gets almost half its oil from Russia, or 2.3 million bpd.

So why are folks saying India might’ve reached its limit?

1. 👷 Infrastructure: Few Indian refineries are equipped to process the Urals crude that Russia produces. And fewer seem interested in building the new infrastructure needed to handle more Urals.
2. 💱 Currencies: India-Russia negotiations over longer term contracts recently collapsed, in part because Western sanctions prevent India from paying in US dollars, but Russia doesn’t want Indian rupees.
3. 🌐 Geopolitics: India’s purchase of Russian oil not only irritates the West, but potentially also India’s long-time suppliers like Saudi Arabia.

Intrigue’s take: But even with the above complications, and as we hit India’s monsoon season (when demand usually drops), India’s shipments of Russian oil just keep hitting new records (for the 11th straight month now).

So what’s going on? 

A new report suggests India is re-selling Russian oil to the West as processed products like gasoline. And that’s not only profitable, but legal. So there’s a solid chance Indian refineries will keep smashing those records.

Also worth noting:

• According to one estimate, India’s oil demand could hit 9 million bpd by 2040.