In December, India's oil imports from Russia plummeted to a near one-year low, as some Sokol-grade crude shipments failed to be delivered due to payment issues.
Media reports indicate that after reaching a historical peak in May of the previous year, India's Russian oil imports consistently declined, drastically dropping between November and December, reaching a level of 1.48 million barrels per day last month.
The decline is attributed to payment issues, where six tankers carrying Sokol-grade crude could not complete their deliveries. Viktor Katona, the chief crude analyst at Kpler, revealed that the Sakhalin-1 consortium, responsible for oil extraction projects in Russia's Far East, was unable to open a bank account in the UAE, preventing its buyers from making the scheduled payments in the local currency, Dirham.
Traditionally, Russia-India trade has frequently utilized third-party currencies for settlements, including the Chinese yuan and Dirham.
Despite the setback, trade in Sokol-grade oil between Russia and India is expected to continue. Katona stated that three vessels carrying Sokol-grade crude and other cargoes will proceed with "ship-to-ship" transfer operations, with India as their final destination. Among the six tankers stranded off the Indian coast, two are likely to reroute to China.
Russia has become India's largest oil supplier. According to Kpler data, in 2023, India's total oil imports from Russia doubled compared to the previous year, averaging 1.79 million barrels per day. Indian refiners specifically purchased an average of 140,000 barrels of Sokol-grade crude per day. In contrast, oil imports from Iraq, India's second-largest oil supplier, decreased by 11% to 908,000 barrels per day.
