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December 10, 2023

India’s Russian oil binge sends Middle East imports to 19-mth low -trade

India’s imports of Middle Eastern oil hit a 19-month low in September, while imports from Russia increased despite processing disruptions that reduced overall crude imports.

According to the reports, Iraq continued to be the top provider, but Russia surpassed Saudi Arabia as the second-largest supplier after a month-long gap.

Due to maintenance at refiners like Reliance Industries RELI.NS and Indian Oil Corp IOC.NS, India’s total oil imports in September fell to a 14-month low of 3.91 million barrels per day (bpd), down 5.6% from a year earlier, according to the statistics.

It was indicated that India’s imports from the Middle East decreased to nearly 2.2 million bpd, down 16.2% from August, while imports from Russia jumped to approximately 896,000 bpd, up 4.6% after declining in the two months prior.

The Middle East’s share of India’s oil imports fell to 56.4% from 59% while Russia’s share increased to an all-time high of 23% from 19% the previous month.

The percentage of Caspian Sea oil increased from 24.6% to 28%, primarily coming from Kazakhstan, Russia, and Azerbaijan.

India has overtaken China as Russia’s second-largest oil consumer, taking advantage of lower pricing as some Western companies avoid dealing with Moscow due to its invasion of Ukraine.

“The discount on Russian oil has narrowed now but when you compare its landed cost with other grades such as those from the Middle East, Russian oil turned out to be cheaper,” said a source at one of India’s state refiners.

The report indicated that although imports from Iraq fell to 948,400 bpd, their lowest level in a year, imports for Saudi Arabia plunged to a three-month low of roughly 758,000 bpd, down 12.3% from August.

United Arab Emirates imports decreased to a 16-month low of roughly 262,000 bpd.

Increased consumption of Caspian Sea oil has decreased OPEC’s market share in India, the world’s third-largest importer and consumer of oil, to its lowest level ever between April and September, the first half of the fiscal year.

Indian refiners decreased their purchases of African oil, which they primarily purchased on the spot market, in the first half of current fiscal year. However, supply from the Middle East rose from a low base last year when the second wave of the coronavirus cut fuel demand.

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