India’s Russian oil imports slip in Oct, Saudi supply rebounds from Sep low

In October, oil imports from Saudi Arabia jumped nearly 65 per cent month-on-month to 7,96,659 bpd. In September, volumes from Riyadh had slumped, largely due to price advantage of competing crude oil grades from other countries and maintenance shutdown at a few units. Analysts had viewed the unusually low volumes of Saudi Arabian oil imports in September as temporary, and predicted a strong rebound in October. As for supplies from Iraq, oil import volumes in October were nearly flat month-on-month at around 9,35,000 bpd.

RIL, which has been among the top Indian buyers of Russian crude since the Russia-Ukraine war broke out in February last year, scaled back its offtake of Moscow’s oil in October as its Jamanagar refinery complex was undergoing a partial maintenance shutdown. RIL imported around 230,000 bpd of Russian crude during the month, down 24.3 per cent from September volumes, as per Kpler data. RIL’s overall oil imports in October stood at 968,384 bpd, the lowest in 13 months. However, with the company’s units now out of maintenance, Russian oil imports are likely to rise in November.

“Russia slipped back some 200,000 bpd after its 1.78 million bpd reading in September, mostly on the back of weaker buying from Reliance and several cargoes slipping into early November instead of late October. In the first three days of November alone, there are 10 tankers to be discharged into Indian ports, carrying 11 million barrels. In view of this, we expect November imports from Russia to come in around 1.8 million bpd again,” Kpler’s lead crude analyst Viktor Katona said.

In October, Nayara Energy Ltd (NEL) emerged as the largest Indian buyer of Russian crude, slightly surpassing state-owned Indian Oil Corporation Ltd (IOC), which has consistently been the largest Indian offtaker of Russian oil for a few months now. NEL, which is partly owned by Russian oil major Rosneft, imported 306,807 bpd of Russian oil, while IOC imported 303,944 bpd.

From being a marginal supplier of crude oil to India before the war in Ukraine, Russia turned into New Delhi’s largest source of crude as Moscow started offering deep discounts after Western buyers started shunning its oil. Prior to the war in Ukraine, Iraq was India’s largest supplier of crude oil, followed by Saudi Arabia. India is the world’s third-largest consumer of crude oil and depends on imports to meet over 85 per cent of its requirement.

According to Katona, apart from a likely increase in oil imports from Russia in November and December, India’s overall oil imports are also expected to rise in this high-demand festival season. “We believe the average pace of incoming cargoes would move higher to 4.7 million bpd (from October’s 4.5 million bpd), so there’s a solid 200,000 bpd upside still in Indian buying, mostly accounting for Reliance’s much-anticipated return after autumn maintenance,” he said.