Why Russia is buying gasoline from India for the first time

Russia has begun importing gasoline from India for the first time, marking a significant shift in its energy strategy amid ongoing attacks on its refineries by Ukrainian forces. This move comes as repeated strikes have severely disrupted Russia’s refining capacity, leading to critical fuel shortages within the country. The situation has forced Russia, historically a major exporter of refined petroleum products, to halt exports of both gasoline and diesel to prioritize domestic needs. The first shipment arrived on August 5, according to data from Kpler, a maritime analytics firm cited by Bloomberg. The fuel was sourced from Nayara Energy Ltd, an Indian refiner with ties to Rosneft, Russia’s largest oil company. The long-distance transport of gasoline from India to Russia highlights the growing strain on Russia’s energy infrastructure. The shipment involved a complex logistics chain, including ship-to-ship transfers off the coast of Egypt. A Russian-flagged tanker named Cyclone loaded approximately 42,000 tonnes of gasoline at Vadinar, India’s western coast, on June 18. It was then transferred to an Oman-flagged vessel called Garnet at Damietta Port, located near the Mediterranean coast of Egypt, on July 6. The Garnet eventually reached Russian shores in early August. This method of transferring cargo between vessels allows for faster transit times and reduces exposure to potential sanctions or restrictions on direct shipping routes. Nayara Energy, which operates the 400,000-barrel-per-day refinery at Vadinar, has become a key player in this new dynamic. The company has relied heavily on so-called dark-fleet tankers, unregistered vessels often used to bypass international sanctions, to import crude oil and export refined products. This reliance became even more pronounced after the European Union imposed sanctions on Nayara Energy in July 2023. These measures have compelled the company to seek alternative markets and transportation methods, contributing to the recent shift in Russia’s procurement strategy. The reduction in Russia’s refining output has been substantial. In July, average crude processing levels dropped to around 3.6 million barrels per day, roughly one-third less than the typical seasonal rate. This decline has been attributed to sustained attacks by Ukrainian forces on multiple refineries. Over the past few weeks, Ukraine has targeted five refineries, with at least two more under attack. These strikes have significantly hampered Russia’s ability to meet domestic fuel demands, forcing the government to take emergency measures to secure supplies. India’s role in this scenario is further underscored by its increasing exports of refined products to Russia. The first shipment from India to Russia represents a departure from historical patterns, where Russia typically exported rather than imported refined fuels. This change reflects broader shifts in global energy dynamics, influenced by the ongoing conflict in Ukraine and escalating tensions between the United States and Iran in the Middle East. Both crises have contributed to tighter global fuel supplies, creating opportunities for countries like India to fill the gap. Additional shipments are reportedly in the works. According to Kpler, another tanker named Varg loaded nearly 40,000 tonnes of gasoline at Vadinar on July 6. It is believed to have undergone a ship-to-ship transfer at Damietta towards the end of July. The receiving vessel for this cargo remains unidentified, though the Beast, an unnamed tanker, is considered a likely candidate. Tracking data indicates that the Beast was present at Damietta and showed an increase in draft between July 30 and 31. Despite declaring Tangier, Morocco, as its intended destination, the vessel has since sailed northward into the Atlantic Ocean with the cargo still aboard. Further details on subsequent shipments remain pending, but the trend suggests that India will play an increasingly vital role in supplying Russia with refined fuels. This development underscores the evolving nature of global energy markets in the face of geopolitical instability.