Russia overtakes UAE in naphtha exports to India

Russia has replaced the United Arab Emirates (UAE) to become India's top naphtha supplier, primarily owing to the huge discounts offered by Russian suppliers and the re-routing of trade flows in the aftermath of Moscow's Ukraine invasion.

The UAE had long been India's top source of imported naphtha, which was used to manufacture petrochemicals that end up as plastics and polyester fibers, while India previously bought little Russian naphtha because of high logistical costs.

But this year, discounted Russian supplies in the aftermath of the EU's sanctions on Moscow's fuel imports as well as the higher cost of natural gas, an alternative feedstock for petrochemical makers, has found eager naphtha buyers among bargain-hunt.

India shipped in 2.1 million metric tons of naphtha in January-September, Vortexa data showed, of which 37 per cent or 770,000 tons were Russian origin product, compared with 154,000 tons for all of 2022.

By comparison, Vortexa said naphtha supplies to India from the UAE dipped to 686,000 tons in January-September from about 697,000 tonnes in the first nine months of last year.

LSEG data showed about 750,000 tons of Russian naphtha imports by India in the first nine months of 2023, up from only around 185,000 tons in all of 2022 and one or two small parcels in 2019 and 2017. The LSEG showed India imported about 670,000 ton... from the UAE in January to September, down from around 726,000 tons in the same period last year. Despite this year's surge in buying, India ranks only seventh among importers of Russian naphtha, according to data from ship-tracker Kpler.

Despite this year's surge in buying, India ranks only seventh among importers of Russian naphtha, according to data from ship-tracker Kpler, and is itself a major naphtha producer and exporter.

Most of the Russian naphtha was imported by Reliance Industries, operator of the world's largest oil refining complex, according to LSEG and Kpler data. Reliance started buying naphtha from Russia in September last year and the volume increased after the fuled price cap imposed on Russia by the western nations.