India’s crude oil imports during June 2024 declined to a four-month low of 18.5 million tonnes (mt), after the world’s third largest importer procured record high cargoes of the critical commodity in May.
After rising for four consecutive months, beginning February this year, crude oil imports by India fell by 15 per cent m-o-m and almost 6 per cent y-o-y in June on a provisional basis, Petroleum Planning and Analysis Cell (PPAC) data showed.
India procured a record 21.8 mt of crude in May, the highest on record as refiners topped up to meet domestic demand for auto fuels as well as for export opportunities. Subdued interest from China also spared more barrels to be shipped to India.
During June as well, Indian refiners continued their purchasing momentum from Russia, its largest supplier. The inbound volumes were in the range of 2 million barrels per day (mb/d) with both public and private sector refiners lifting record volumes.
Even as Indian lifted higher cargoes from Russia, the import from its traditional suppliers, Iraq and Saudi Arabia, declined during June, both on an annual and monthly basis.
However, import of crude oil from the US has been rising since March 2024. Trade sources said that imports were of light sweet grade due to weak market fundamentals amid refinery outages in Europe and the US lowered demand, which coupled with high supply availability, specifically from US exports, and better price arbitrage compared to West Asian grades.
Rising consumption
Crude oil exporting bloc OPEC said that India’s current robust economic expansion, coupled with a positive outlook for the manufacturing sector, is expected to bolster ongoing demand for oil products in the near term.
“This is expected to drive growth of 0.2 mb/d, Y-o-Y, on average in H2 2024. Moreover, government initiatives aimed at supporting manufacturing and household consumption are expected to underpin demand for LPG, ethane and diesel,” OPEC said in its monthly oil market report for July 2024.
At the same time, India’s jet fuel demand may also surge as the government adds more airport terminals amid an ongoing recovery in air travel. Jet fuel demand is expected to outperform all other transport fuels, leading to oil demand growth in the 2024 fiscal year, it added.
“Additionally, the country’s annual traditional festivities are set to support transportation activity and boost gasoline demand. However, cyclone activity in eastern India and a forecast of above-average rainfall this monsoon season could weigh on agricultural and construction activities, thus in turn affecting oil demand in the third quarter. In 2024, India is expected to see healthy oil demand growth of 233,000 b/d, Y-o-Y, for an average of 5.58 mb/d,” OPEC said.