India’s crude oil imports from Russia fell to a 7-month low in August
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New Delhi : India’s crude oil imports from Russia fell to a seven-month low in August as demand fell due to monsoon rains. This information has been obtained from industry statistics. India’s crude oil imports from Russia, the world’s third largest oil consumer, declined for the third consecutive month in August. According to data from ‘Vortexa’, an energy tracking company, India bought 1.46 million barrels of crude oil per day from Russia in August.
Last month, India bought 19.1 lakh barrels of oil per day from Russia. Apart from this, Indian refinery companies have also reduced imports from Iraq, another top supplier. Imports from Iraq have come down from 8,91,000 barrels per day (bpd) to 8,66,000 barrels per day. Data shows that during this period, imports from Saudi Arabia have increased from 4,84,000 barrels per day in July to 8,20,000 barrels per day.
Russia accounted for less than one per cent of India’s oil imports before the Russia-Ukraine conflict broke out in February last year. Due to getting Russian oil at concessional rates, after that Indian refinery companies started increasing imports from Russia. Crude oil imports from Russia reached a high of two million barrels per day in May.
Russian oil was banned by European countries and some buyers in Asia like Japan after Russia’s invasion of Ukraine in February last year. Due to this, Russian Ural crude oil started being traded at a lower price than Brent crude (the global benchmark). However, discounts on Russian Ural grades have declined from levels of around $30 a barrel in the middle of last year to less than $10 a barrel.
Indian refinery companies now biggest buyer of Russian crude oil
Indian refinery companies convert crude oil extracted from under the ground into finished products like petrol and diesel. Indian refiners are now the biggest buyer of Russian crude as Chinese imports have been hit due to mass electrification of vehicles and instability in the economy.
Russia’s share in the total imports of Indian refinery companies was less than two percent before the Ukraine war, which later reached 33 percent due to the availability of subsidized oil.
Domestic demand expected to pick up on festive demand in Q4:
Many Indian refiners have planned maintenance from September to November, which could limit their crude imports, said Serena Huang, Asia-Pacific analyst at Vortexa.
But in the fourth quarter, domestic demand is expected to pick up on festive demand. Apart from this, India’s crude oil imports will remain high for the rest of the year due to strong export margins.
India’s crude oil import from UAE also decreased in August:
India’s crude oil imports from the United Arab Emirates (UAE) also declined to 2,73,000 bpd in August, from 2,90,000 bpd in August. India’s purchases from the US have come down to 160,000 barrels per day from 219,000 barrels per day in July.
India’s total crude oil imports declined by 7 percent to 4.35 million barrels per day in August. However, crude imports are expected to increase in October as demand picks up in the fourth quarter.
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