India’s oil imports rebound in November with refineries back in full swing

India’s oil imports had declined to a yearly low in October amid maintenance-related shutdowns at some refineries and the geopolitical crisis in West Asia, which had fanned fires of volatility in international oil prices. The oil prices have trended lower since and are relatively stable as well, which evidently contributed to higher imports.

In November, Indian refiners cumulatively imported 4.69 million barrels per day (bpd) of crude, up 6.6 per cent month-on-month, according to provisional vessel tracking data from international commodity market analytics firm Kpler.

Share of the barrel

Supplies from Russia — India’s largest source market for crude — rose nearly 2 per cent sequentially to 1.79 million bpd, accounting for over 38 per cent of India’s total oil imports in November. Oil import volumes from Iraq were sequentially higher by 1.2 per cent at 0.88 bpd. The growth was the lowest — 0.4 per cent — for Saudi Arabia. India’s oil imports from Saudi Arabia stood at 0.62 million bpd in November. Iraq and Saudi Arabia accounted for 18.7 per cent and 13.2 per cent of India’s crude oil imports in November, respectively.

Oil imports from the UAE in November rose 15.1 per cent sequentially to 0.43 million bpd, while those from the US were higher by almost 31 per cent at 0.22 million bpd.

“Indian imports have rebounded after the annual lows seen in October. Russia remained the largest supplier overall, with volumes to India being quite range-bound lately. India’s buying of Iraqi barrels has been just as stable, too, with India nominating a fixed 860,000-870,000 bpd for the past three months. Saudi Arabia, on the other hand, continues to struggle with another month where it lagged Russia and Iraq by a wide margin,” said Viktor Katona, head of crude analysis at Kpler.

Among the top suppliers, Saudi Arabia has been hurt the most in terms of market share erosion due to Russia’s rise as India’s mainstay for crude, as Riyadh’s crude has generally been priced at a significant premium to oil from Russia and even Iraq.

Changing mix

Prior to the war in Ukraine, Iraq and Saudi Arabia were the top two suppliers of crude oil to India. But as the West started weaning itself off Russian energy supplies following Moscow’s February 2022 invasion of Ukraine, Russia started offering discounts on its crude and Indian refiners started snapping up the discounted barrels.

As the world’s third-largest consumer of crude oil with a high import-dependency level of over 85 per cent, India is extremely sensitive to oil prices. Although trade sources have indicated that discounts on Russian crude have shrunk over time, Indian refiners have evidently remained keen on buying Russian oil as given the high import volumes, even lower discount levels lead to significant savings.