Crude oil imports to India from its largest supplier Russia may have topped out in May this year when the world’s third largest energy guzzler imported close to 2 million barrels per day (mb/d) from the erstwhile Soviet Union.
According to energy intelligence firm, Vortexa, India imported 1.702 mb/d of crude in April 2023, which surged to 1.928 mb/d a month later but declined to 1.822 mb/d in June before appreciating again to 1.918 mb/d in July.
“Looking ahead, India’s crude imports from Russia potentially topped out in May, declining in June and July. Total crude inflows in July are seen lower with the start of refinery turnarounds,” OPEC said in its monthly oil market report.
India’s crude imports declined m-o-m for the fourth month in a row to an average of 4.68 mb/d in June 2023 (April: 4.89 mb/d and May: 4.84 mb/d), as the country moved into the lower demand monsoon season, the report pointed out.
Compared to the previous month (May), crude inflows were down 1,56,000 barrels per day (b/d), or over 3 per cent. Crude imports slipped by just over 1 per cent y-o-y, it added.
Trade sources expect India’s crude imports from Russia and Saudi Arabia to further decline in August and September as both the countries have announced further production cuts to strengthen crude oil prices, which are appreciating in line with decline in output with Brent hovering at $86.44 a barrel and WTI at $82.88 on Friday afternoon.
Saudi Arabia and Russia, the world’s top two crude oil exporters, will continue with the voluntary production cuts in August and September. While Saudi Arabia extended its production cut of 1 mb/d to the end of September, Russia announced a cut of 3,00,000 bpd. Saudi Arabia has also indicated that the production cuts could be extended, if needed.
Earlier this month, Vortexa’s Head of APAC Analysis, Serena Huang told businessline, “With Russia ramping up its refinery runs post maintenance to meet domestic demand and cutting crude production, the country’s crude exports have evidently fallen. Russian crude exports in July are down nearly 6,50,000 b/d versus the peak seen in April/May.”
Crude exports could retreat further if Russia continues to raise its domestic refinery runs in August, she anticipated.
Indian refiners, particularly state-run oil marketing companies (OMCs) topped up on Ural, Russia’s flagship export grade, in anticipation of decline in supply of the medium sour grade. Imports of Ural hit a new high in July aided bolstered by expected supply disruptions in August and September as Russia limits exports to shore up prices and meet domestic demand.
Indian refiners imported around 1.6 mb/d of Urals last month, higher by 18 per cent compared to June and 14 per cent higher than the record in May 2023.