Oil & Gas

UAE loses out as India opts for cheaper Russian naphtha

March 24, 2025, 11:52 AM

A Russian oil tanker transits the Bosphorus. Russia’s share of India’s naphtha imports has grown by 15 percentage points to more than 50 percent

UAE share drops by 20%
India’s private refineries lead shift
State-owned facilities could follow

The UAE, led by Abu Dhabi, has lost its position as India’s biggest supplier of the refined crude oil product naphtha as discounted Russian cargoes flood the market.

Naphtha has many uses including as a precursor to gasoline and other liquid fuels, and as solvents or diluents for paints and the rubber industry.

India is Asia’s seventh biggest importer of naphtha, having imported 3 million tonnes in the previous 12 months.

According to ship-tracking data from OilX and Kpler, the UAE’s share of India’s naphtha imports – primarily supplied by Abu Dhabi National Oil Company (Adnoc) – has dropped to just over 20 percent from close to 40 percent a year ago.

By contrast, Russia’s share of India’s naphtha imports has grown by 15 percentage points to more than 50 percent now, the data show.

“India will continue to import more oil from Russia. Of course, it depends on the price,” India-based energy expert Narendra Taneja said at a conference.

Privately owned refineries in India are entering into multibillion-dollar deals to import oil and other products from Russia. “State-owned refineries might go the same way,” Taneja said.

Russian naphtha is trading at around $14 per tonne cheaper than its Middle Eastern alternatives, at a price of roughly $600 per tonne.

Russia’s price advantage is particularly significant as refiners face relatively low margins in the Indian market, making more affordable feedstock a preference.

Facilities operated by India’s HPCL Mittal Energy and Reliance Industries have been primary beneficiaries of cheaper, Russian naphtha.

Demand for naphtha is expected to rise as Indian refiners add capacity.

India has also turned to discounted Russian crude oil to meet its needs. India is the world’s third biggest crude oil consumer after China and the US.

Russia is the world’s third biggest oil producer and has been discounting its hydrocarbon exports since Western nations expanded sanctions following its full invasion of Ukraine in 2022.