India has sharply increased its imports of Russian crude oil and coal, deepening energy cooperation with Moscow in the wake of disruptions to global supply chains and rising energy prices triggered by the conflict involving Iran.

According to data compiled by commodity analytics firm Kpler, the world’s third-largest oil importer is expected to receive a record 2.55 million barrels per day (bpd) of Russian crude in June, The Caspian Post reports, citing Reuters.

This would mark a significant increase from the 2.13 million bpd imported in May, which represented the third-highest monthly level on record and was only slightly below the 2.16 million bpd imported in May 2023.

Russia’s share of India’s total crude oil imports, projected at 5.29 million bpd in June, is expected to approach 50%. This represents a substantial increase from the average share of 23% recorded during the three months preceding the outbreak of the conflict on February 28, when the United States and Israel launched airstrikes against Iran.

India’s shift toward Russian oil came after the administration of US President Donald Trump temporarily waived sanctions linked to purchases of Russian crude. The measure was introduced to help stabilize global energy supplies after Iran effectively shut down the Strait of Hormuz in response to the attacks. However, the waiver expired on June 17 and was not renewed by the US Treasury.

The expiration of the waiver has created uncertainty over future Russian oil imports. Analysts note that the direction of India’s purchasing strategy will largely depend on whether domestic authorities and refiners regain confidence in the reliability of supply routes from the Middle East.

India has already cut back imports from several Gulf producers. Shipments from Saudi Arabia, for example, are expected to total 349,000 bpd in June, compared with an average of 832,000 bpd during the three months before the conflict began.

In addition to crude oil, India has significantly expanded its coal purchases from Russia.

The country is expected to import 3.16 million metric tons of coal of all grades from Russia in June. Although this figure is slightly below May’s 3.27 million tons, it remains among the highest monthly volumes ever recorded.

The import levels recorded in May and June rank as the second- and third-highest on record, respectively, trailing only the 3.76 million tons imported in May of last year. June’s volume is also 51% higher than the average recorded during the three months before the conflict.

Russia is projected to surpass Australia as India’s second-largest coal supplier in June as New Delhi continues efforts to diversify its energy sources.

Imports of metallurgical coal, a key raw material used in steelmaking, have also risen significantly. In May, India imported 2.02 million tons of Russian metallurgical coal, marking the second-highest monthly figure on record.

Australia likewise posted strong export volumes to India in May, shipping 4.05 million tons, the highest level since July of last year. These deliveries helped drive India’s total metallurgical coal imports to a record 8.05 million tons.

India’s steel industry is expected to expand substantially over the coming decade. Annual steel production is projected to increase from approximately 168 million tons to 400 million tons by 2035, while around 25 million tons of new production capacity is expected to be added this year alone.

Although India possesses extensive reserves of thermal coal used for electricity generation, its domestic production of metallurgical coal remains limited and generally lower in quality. As a result, imports from countries such as Australia, Russia, the United States, and Mozambique continue to play a crucial role in meeting industrial demand.

Consequently, India is expected to further increase imports of metallurgical coal while broadening its supplier network in an effort to reduce reliance on Australia.

Overall, Russia is expected to remain one of India’s most important energy partners, with the future scale of crude oil imports likely to depend in part on whether the United States decides to reintroduce or intensify sanctions-related pressure on Moscow.