Despite China's soaring oil demand, why does Russia favor the Indian market?
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According to commodity-data company Kpler, Russia will continue to export as much oil as it can to India despite a recovery in Chinese demand.

After the US and EU imposed sanctions on Moscow, India, which bought almost no Russian oil a year ago, has emerged as an important market. According to Viktor Katona, lead crude analyst at Kpler, India imported roughly 1.85 million barrels a day from Russia in February, which was near to its daily maximum of about 2 million barrels.

Russia will want to retain the Indian market because it is more lucrative and gives its crude sellers greater control, Katona said, even though China could “buy virtually the entire Russian oil exports” as it abandons Covid-zero policies.

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The International Energy Agency estimates that Russia shipped 2.3 million barrels of crude to China every day in the previous month. After travel restrictions imposed during the pandemic were lifted, the IEA forecasts that the Asian giant’s oil demand will increase by about 900,000 barrels per day this year.

This year, Chinese refiners might want to purchase more Russian crude, but they also have the ability to handle their own shipments. That would prevent Russia from earning money from the “parallel gray fleet” of tankers it has set up to send crude to India, according to Katona.

It takes less time to get to India. Compared to 40 to 45 days to China, a tanker travels to India from Russia’s western harbors in 35 days on average, according to Katona.

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Rosneft PJSC, the biggest producer in Russia, also holds a 49.13% share of Nayara Energy Ltd., which is in charge of the second-largest refinery in India and associated shipping facilities. This month, almost all of the Vadinar plant’s petroleum feedstock has come from Russia, according to Katona.