India’s private refineries shift to Russian supplies, slashing UAE’s market share by 20%.
The United Arab Emirates (UAE), led by Abu Dhabi, has lost its dominant position as India’s top naphtha supplier, as Russian shipments flood the market at lower prices. This shift is driven by private Indian refineries, with state-run refineries potentially following suit, reported agbi.com.
Russia Gains the Upper Hand in India’s Naphtha Market
Naphtha, a key ingredient in producing gasoline, solvents, and rubber-based products, is a crucial commodity for India, which imported 3 million tonnes in the past year.
According to ship-tracking data from OilX and Kpler, the UAE’s market share in India’s naphtha imports—previously close to 40%—has plunged to just over 20%. Meanwhile, Russia’s market share has surged by 15 percentage points, now exceeding 50%.
Price Advantage Driving India’s Shift to Russia
“India will continue to import more oil from Russia. Of course, it depends on the price,” said Narendra Taneja, an energy expert based in India, at a recent conference.
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Currently, Russian naphtha is trading at around $14 per tonne cheaper than its Middle Eastern alternatives, with a market price of roughly $600 per tonne
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This discount is particularly appealing as Indian refiners face low profit margins, making cost-effective sourcing a necessity
Private Refiners Leading the Change
Major Indian refiners, such as HPCL Mittal Energy and Reliance Industries, have been key beneficiaries of cheaper Russian naphtha. With multibillion-dollar deals being signed, state-owned refineries might also follow suit in sourcing naphtha from Russia.
India’s Growing Demand and Russia’s Role
India’s naphtha demand is expected to rise as the country expands refining capacity. Additionally, India—the world’s third-largest crude oil consumer after China and the US—has increasingly turned to discounted Russian crude oil to meet its energy needs.
Russia, the world’s third-largest oil producer, has been selling discounted hydrocarbon exports since 2022 after facing Western sanctions over its invasion of Ukraine.
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