The import of crude oil by India, the world’s third-largest importer, hit a 12-month low of 17.80 million tonnes (MT) in September this year largely on account of lower requirement due to autumn refinery maintenance and lower consumption during monsoons.
According to the Petroleum Planning and Analysis Cell (PPAC), crude oil imports on a provisional basis declined by 5 per cent M-o-M, but were higher by 6 per cent on an annual basis.
Prior to this, the lowest cargoes were received in September 2022 at 16.77 MT.
According to Vortexa, India bought around 4.196 million barrels per day (mb/d) of crude oil, which is the lowest in FY24. The decline was partly compensated by lifting more cargoes of Iraq’s Basrah, which is also a medium sour grade similar to Urals and preferred by Indian refiners. Russia accounted for 38 per cent of total imports.
OPEC in its monthly oil market report had said that India’s crude imports are expected to be lower in September, as the monsoon season curbs domestic needs, before picking up in October as the start of the festival season improves domestic demand.
Imports were also impacted due to rising prices of medium sour grades Urals (Russia) and Arab Light (Saudi Arabia). Voluntary production cuts by Saudi Arabia and Russia, the world’s top two crude oil exporters, forced India to procure more cargoes from Iraq. Besides, discounts on Russian crude have also come down.
As per JM Financial, Russia’s share of India’s crude imports remained strong at around 38 per cent in August 2023, though slightly lower from around 40 per cent in May-July (but significantly higher vs around 20 per cent in December 2022 and one-two per cent pre-Ukraine invasion).
However, as per CMIE, discount on Russian crude to India continues to be lower at around $4-5 per barrel in May-August 2023 vs $6-10 earlier; this seems to be due to decline in availability of Russian oil in spot markets partly driven by its pledge to cut oil exports by 0.3 mb/d till end-December 2023, it added.
India procures Russian crude oil from spot markets, whereas Middle Eastern crude is largely through term contracts.