(Bloomberg) -- New York is buying an unusually large amount of gasoline and diesel from India — a country that has become a top outlet for sanctioned Russian oil.
About 89,000 barrels per day of Indian gasoline and diesel will reach New York this month, the most in nearly four years. This accounts for more than 40% of the region’s total imports for January, according to Kpler data compiled by Bloomberg. That’s a jump from an average of 5% last year.
These imports are a crucial replacement of European fuel shipments, which have slowed in recent months and will likely dry further once new Russian sanctions begin Feb. 5.
Meanwhile, India is poised to buy even more of the deeply discounted Russian crude rejected by the Group of Seven, turning it into valuable fuel and selling it to places impacted by sanctions.
India’s imports of Russian oil hit a record this month, with daily volumes reaching 1.39 million barrels in January, according to Kpler. Figures show Russia has been India’s top supplier since June.
This growing trade pattern underscores the sanctions’ limitations and their unintended impact on consumers. Increasing reliance on imports from as far away as India puts the US East Coast at greater risk of supply shortfalls. A cargo from India often takes more than a month to arrive to New York, two to three times what it takes for a European shipment.
Stockpiles of diesel and heating oil on the East Coast have languished at their lowest level ever for this time of year, while gasoline supplies also have dwindled to decade-lows, leaving the region more vulnerable to outages and price spikes.
(Updates Indian volumes in fifth paragraph.)
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