Why Russia Favours Indian Market Despite China's Surging Oil Demand

While China could "buy literally the entire Russian oil exports" as it abandons Covid-zero policies, Russia will want to keep the Indian market because it is more lucrative.

Russia will keep selling as much oil as it can to India despite the rebound in Chinese demand, according to commodity-data firm Kpler. 

India purchased almost no Russian oil a year ago, but has become a crucial market after the US and European Union imposed sanctions on Moscow. India imported around 1.85 million barrels a day from Russia in February, close to its potential maximum of about 2 million barrels a day, said Viktor Katona, lead crude analyst at Kpler. 

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

Last month, Russia exported 2.3 million barrels a day of crude to China, according to the International Energy Agency. The Asian giant's oil demand is set to grow by about 900,000 barrels a day this year after travel restrictions imposed during the pandemic ended, the IEA estimates.