Despite August dip, India’s crude imports poised for sharp rebound

India’s crude oil imports are expected to drop to 4.3 million barrels per day (bpd) in August, a decrease of 300,000 bpd month-over-month, according to Vortexa. 

This decline aligns with typical seasonal trends, as August historically sees the lowest crude arrivals due to reduced domestic demand for gasoline and diesel during the monsoon season, Ivan Mathews, head of APAC analysis, said.

As a result, many refineries schedule maintenance and lower crude throughput during this period, he added. 

However, according to Vortexa, the reason behind India’s decline in oil imports is different. 

Declining flows into Nayara Energy’s refinery

“India’s lower crude imports this month were mainly due to the decrease in flows into Nayara Energy’s refinery,” Mathews said. 

Since being hit with EU sanctions in July, Nayara, which accounts for approximately 8% of India’s 5.2 million barrel-per-day refining capacity, has faced significant challenges in fuel transportation. 

These sanctions led to shippers withdrawing their services, compelling the refiner to reduce its crude processing operations.

Crude arrivals at Vadinar, the site of Nayara Energy’s refinery oil terminals, have significantly decreased, marking a steady decline for two consecutive months since July, Vortexa data showed. This port accounts for the majority of the overall reduction in crude imports into India.

Crude arrivals at the Nayara Energy refinery, specifically at its oil terminals connected to Vadinar port, decreased by 100,000 barrels per day month-over-month in August, according to Vortexa data.

This month, the Nayara Energy refinery terminal stopped receiving non-Russian crude imports entirely, as mainstream vessels are now avoiding it, Mathews said. 

This month has seen a slight increase in Urals crude imports to the refinery. This follows brief disruptions last month, with vessels on the Russia-India trade route now resuming crude discharges.

Processing rates hit

“The overall drop in crude inflows impacted the refinery’s processing rates, resulting in a corresponding decrease in product exports,” Mathews said. 

Due to EU sanctions on Nayara Energy, the refinery is expected to boost its acquisition of Russian crude, substituting it for non-Russian oil.

Hence, we could see arrivals of crude into the refinery to rebound from August levels in the months ahead.

Imports to rebound

India is expected to see a rise in crude oil imports during September and October, primarily due to increased shipments of Russian crude, according to Vortexa.

Mathews said:

We expect refineries in India to continue processing Russian oil, as their feedstock procurement decisions are mainly economics-driven.

Market sources indicated to Vortexa that Indian Oil Corporation and BPCL have restarted purchasing Russian crude for September and October shipments. 

This is likely driven by the widening discounts of Urals crude compared to North Sea Brent since early August (according to Argus), making Russian oil more attractive to refiners.

India and Russia have committed to strengthening their bilateral trade relations, suggesting a likely continuation or even increase in Russian oil imports by India, despite tariff pressures from the US. 

The supply chain for crude oil from Russia to India is anticipated to remain robust, even in the face of ongoing sanctions and regulatory challenges, according to Vortexa.

Supply

Vortexa analysis indicates that the current fleet capacity is sufficient to handle as much as 93% of Russia’s crude oil exports to India in the first half of 2025. 

Only a small number of additional vessels would be needed to accommodate the full volume of these flows.

Maintaining crude oil flows from Russia to India will likely require additional tonnage, which is expected to be supplied by older or less competitive vessels re-entering service through the sale-and-purchase market.

“Finally, refineries in India typically increase processing rates during September and October, which would necessitate higher crude imports,” Mathews said. 

This is because domestic demand for fuels surges after the end of monsoon season in September and Diwali festivities in October

In the upcoming months, state-owned refineries are expected to increase their crude procurement to meet the domestic market’s fuel demands, according to Mathews.

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