Indian refiners continued their purchase momentum for crude oil from its two largest trading blocs, Russia and Middle East, for the second consecutive month in June.
According to S&P Global Commodity Insights, India is likely to have procured 5.33 million barrels per day (mb/d) of crude oil in the current month, compared to 5.22 mb/d during May 2024.
Russia continued to be the top supplier to the world’s third-largest crude oil importer, with cargoes expected to be around 2.12 mb/d this month, up from 2.15 mb/d in May 2024.
Similarly, cargoes from Iraq, India’s second-largest crude oil supplier country-wise, were almost flat at 1.085 mb/d in June from 1.081 mb/d last month.
Indian refiners also continued the buy momentum from its third largest supplier, Saudi Arabia, at 562,000 barrels per day (b/d) this month from 565,000 b/d in May. However, supplies from The UAE rose to 412,000 b/d in June 2024 from 398,000 b/d last month.
Cargoes from Qatar and Kuwait were also largely flat. India imported 43,000 b/d from Qatar during June (May: 41,000 b/d), whereas cargoes from Kuwait stood at 74,000 b/d (May: 78,000 b/d).
Crude oil imports from West Africa also remained largely flat at 562,000 b/d in the current month from 565,000 b/d in May 2024.
Indian crude oil imports from North America, which are largely sweet grades, rose to 138,000 b/d in June from 123,000 b/d in May 2024.
Crude oil & energy transition
S&P Global Commodity Insights’ Global Director for Crude & Fuel Oil Markets, Joel Hanley, opines that India’s economic development and growth will rely on oil.
“India is committed to being carbon neutral by 2070 and is investing in more sustainable energy such as hydrogen, as well as more accessible power grids but while that is happening, India’s economic development and growth will rely on oil. Now a key supplier of refined products to Europe and beyond, as well as furnishing its own growing population, India’s building of large refineries has helped put it on the energy map,” he added.
The affordability part of the Energy Trilemma (security, affordability and sustainability) has received a “huge boost” from trade with Russia at a discount. Sweet/ sour crude spreads have been turned upside down by the actions of OPEC+ and increased production from the West. Hanley explained that India is now positioned to take advantage of these changes to increase its security and affordability.