India’s Oil Imports: West Asian Supplies Rise as Russian Flows Decline
India’s oil imports from Iraq, Saudi Arabia, Kuwait, and Qatar rose sharply in September as ship-to-ship transfers helped suppliers move crude through the Strait of Hormuz. The development comes amid pressure from the US on top buyers of Russian oil.
Oil imports from India’s largest supplier, Russia, however, declined for the second straight month due to stronger competition from Chinese refiners and tighter Russian crude availability amid Ukrainian attacks on Russia’s oil and gas infrastructure. Industry insiders and analysts said that the decline in Russian oil imports was a result of the ongoing conflict in the region.
Ship-to-Ship Transfers Boost West Asian Oil Imports
The improved availability of West Asian oil comes as a relief for India, given the pressure being exerted by the US on top buyers of Russian oil. According to provisional tanker data, oil imports from Iraq jumped 238.2% sequentially in September to over 551,000 barrels per day (bpd), while those from Saudi Arabia were up 56.2% at almost 543,000 bpd.
Imports of Kuwaiti oil surged 104.4% over August to about 317,000 tonnes, and oil imports from Qatar, which were nil in August, stood at nearly 110,000 bpd. Among West Asian suppliers, only the UAE saw a decline in volumes — down 15.8% month-on-month at around 460,000 bpd.
Russian Oil Imports Decline Amid Geopolitical Uncertainty
The sequential decline in oil imports from Russia was more than made up for by a spurt in imports from West Asian suppliers. Russian oil import volumes had touched a historic high of 2.8 million bpd in July, and September volumes were at a five-month low, although they still accounted for over 35% of India’s total oil imports during the month.
The decline in Russian oil imports was attributed to stronger competition from Chinese refiners and tighter Russian crude availability amid Ukrainian attacks on Russia’s oil and gas infrastructure. Industry insiders and analysts said that the decline in Russian oil imports was a result of the ongoing conflict in the region.
Experts Urge Diversification Amid Geopolitical Uncertainty
Experts believe that it would be prudent for Indian refiners to try and progressively reduce their reliance on Russian crude and step up further diversification of oil import sources. “Going forward, improved Middle Eastern barrels’ availability could see Indian refiners lean more towards them, particularly amid the geopolitical uncertainty surrounding the Graham Act,” said Nikhil Dubey, lead analyst-refining at commodity market analytics firm Kpler.
India’s oil imports from Russia declined almost 9% in September to 1.9 million bpd from 2.1 million bpd in August, according to vessel tracking data from Kpler. Russian oil import volumes had touched a historic high of 2.8 million bpd in July, and September volumes were at a five-month low, although they still accounted for over 35% of India’s total oil imports during the month.
Conclusion
The development comes amid pressure from the US on top buyers of Russian oil. The recently enacted Russia and Iran sanctions law in the US has added a layer of uncertainty around the future of oil imports from Russia. While New Delhi continues to engage with Washington on the new law, experts believe that it would be prudent for Indian refiners to try and progressively reduce their reliance on Russian crude and step up further diversification of oil import sources.
Original Article: India Oil Imports: West Asian Supplies Rise as Russian Flows Decline — Indianexpress