India Shifts From Russian Oil as Global Markets Test Bakken

The Bakken formation is North Dakota's primary oil-producing region, and its producers sell into a global crude market that is being reshaped by Asian buying patterns and geopolitical risk.

Rigzone reported on Oct. 26 that Indian refiners are increasingly turning to Persian Gulf crude and pulling back from their mainstay supplier, Russia. OilPrice.com reported Tuesday that India’s purchases of Russian crude are linked to pricing, discounts and import costs.

India remains the world’s third-largest crude oil importer, according to OilPrice.com. Indian Oil Minister Hardeep Singh Puri said the United States has not pressured India to cut crude imports from Russia. “I never felt anything,” Puri said, as carried by Reuters and reported by OilPrice.com.

Puri said Indian refiners are buying higher volumes of Middle Eastern crude because availability has increased and pricing is more favorable compared with Russian grades. “Whatever people say or do, ultimately it is anchored in their self-interest,” he said.

The shift is visible in recent trade data. India’s crude imports from the Middle East jumped to 2.8 million barrels per day in September, up 32% from August and the highest level since February, according to vessel-tracking data compiled by Reuters and cited by OilPrice.com.

OilPrice.com also said India’s Middle East imports rebounded in September to pre-war levels amid higher volumes exiting, while competition from China for Russian oil resulted in declining imports from Russia.

Russia remained India’s largest crude supplier in September, but imports of Russian oil fell 14% from August to 1.8 million barrels per day, OilPrice.com reported. The share of Russian oil in India’s imports dropped to 33.5% from 46.6% in August.

OilPrice.com said competition from China for Russian oil has helped drive prices higher after China turned to Russian crude while deprived of Iranian oil. It also said the price of Russia’s flagship Urals grade loaded in Baltic ports has jumped and now equals Middle Eastern crudes, whose availability rose as flows through the Strait of Hormuz rebounded.

For Bakken operators, the change matters because North Dakota’s crude competes in a global market shaped by Asian demand, import costs and geopolitical risk. Royalty owners and state producers are exposed to the pricing and supply-chain signals emerging from these shifts.

The broader energy picture also carries warnings for oil and gas markets. Fatih Birol, head of the International Energy Agency, said the global energy transition depends on highly concentrated supply chains, according to OilPrice.com. China dominates wind and solar equipment, battery manufacturing and electric vehicles.

Birol said the age of electricity is coming but oil, natural gas and LNG will still be used. “In my professional life, I have never, never ever seen the dark and long shadow of geopolitics dominating the energy sector in such a way,” he said.

OilPrice.com reported that Southeast Asia has bought $20 billion of Chinese transition technology and products since the start of the year, a move the report said was likely tied to an oil and gas crunch caused by the U.S. and Israel war with Iran. Birol also noted a 60% increase in electric vehicle sales outside China over previous forecasts, driven by the war-related crunch.

The combination of crude arbitrage, energy-security concerns and clean-energy supply-chain concentration suggests that Bakken producers and North Dakota stakeholders face a global market in which geopolitics, Asian buying patterns and transition policy all feed into the outlook for oil demand and pricing.