India’s crude imports rose to a six-month-high in January, government data showed on Monday, as refiners in the world’s third-biggest oil importer and consumer snapped up cheaper Russian supply.

On a monthly basis, imports were up 1.7% to 19.96 million tonnes, which was also 3.5% higher versus January 2022, data from the website of the Petroleum Planning and Analysis Cell (PPAC) showed.

“Indian refining will be even stronger in 2023 – aided by Russian crude improving the profitability of product exports in times of lower domestic consumption,” said Viktor Katona, lead crude analyst at Kpler.

“In general, December-January-February is peak season for Indian refiners, unlike during the monsoon season when construction slows and thus oil demand grinds lower.”

Russian oil accounted for a fifth of India’s overall imports in April 2022 to January 2023, the first eleven months of this fiscal year, compared to just 0.8% in the year earlier period, data from trade sources showed.

Refiners in India have emerged as Russia’s key oil client, snapping up discounted crude shunned by Western nations since the invasion of Ukraine last February.

Reliance Industries RELI.NS, operator of the world’s biggest refining complex, raised Russian oil imports by about 32% in January from the previous month.

The higher imports came despite a slight dip in consumption of fuel, a proxy for oil demand, for January, albeit from a nine-month high in December. Preliminary data also pointed to a recovery in fuel sales for February as a cold wave ebbed.

With Indian oil demand still growing, the trend of higher imports could continue, said UBS analyst Giovanni Staunovo.

Last week, India also cut its windfall tax on crude oil and exports of aviation turbine fuel and diesel.

Asia’s third-biggest economy holds surplus refining capacity and exports refined fuels as well.

Source: Reuters reported by Kavya Guduru in Bengaluru and by Arpan Varghese. Edited by Louise Heavens