India’s oil demands: Iraq may strain to meet needs amid Russia sanctions

Shafaq News/ Middle Eastern oil producers, including Iraq and Saudi Arabia, may struggle to meet India's crude demand in the coming months if US sanctions on Russia disrupt key supplies to the subcontinent, according to oil experts.

Gurmeet Singh, Director General of the Federation of Indian Petroleum Industry (FIPI), stated that India has developed a strategy to replace Russian barrels, which may involve boosting imports from Iraq, Saudi Arabia, and the US, depending on the shifting geopolitical landscape.

Unavailable Shipments

An official from Iraq's State Oil Marketing Organization (SOMO) told S&P Global Commodity Insights, a firm specializing in energy and commodity market data and price assessments, that with regional crude allocations for 2025 already set and spot shipments rarely available, Iraq, OPEC's second-largest producer, is “unlikely to fill any supply gaps for India.”

Saudi crude supplies seem to be constrained as well. With March's loading schedules already filled, India will likely have to wait until at least April to secure any additional Saudi crude.

OPEC Constraints

Iraq and Saudi Arabia’s production is limited by their commitments under OPEC+. While the group has maintained its current production cuts, it is expected to ease them soon, which could boost crude availability in the market.

However, the planned increases for April—56,000 bpd for Saudi Arabia and 12,000 bpd for Iraq—are modest, and any changes to the production cut policy will reportedly depend on market conditions.

Saudi Arabia produced slightly below its target of 8.978 million bpd, reaching 8.97 million barrels. Meanwhile, Iraq, which often falls short of its quota, pumped 4.06 million bpd in January. Although this was a decline from the previous month, it still exceeded its quota by 60,000 bpd.

Sanctions on Russia

On January 10, the US and the UK imposed new sanctions on Russia's energy sector, including restrictions on two of its largest oil producers, Gazprom Neft and Surgutneftegas.

The actual impact of these sanctions remains unclear, with some analysts suggesting that any tangible effect will be minimal.

India received 1.2 million barrels per day (bpd) of Russian Urals crude in January. By February 12, shipments to India had totaled 490,000 bpd, according to data from the National Bureau of Statistics of China.