Russia regained the slot of largest crude supplier to India in September with imports from the country registering an increase of 11.5% to 1.79 million barrels per day against 1.61 million barrels per day in August, data from Vortexa showed. During August, India’s import of Russian crude oil had decreased 17% on month due to lower supplies from the country and lower demand as many domestic refineries went under planned maintenance.
In September, Indian refiners imported more crude oil from Iraq and the Middle East. Russia remained the top supplier last month with its share in the country’s crude import basket at 38%.
Imports from Iraq rose by 16% on month at 894,057 barrels per day in September, accounting for 19% of the country’s total crude oil imports. In August, imports from Iraq accounted for 18.5% of the country’s total imported crude oil volume.
Imports from Saudi Arabia increased by 37% to 688,882 barrels per day in September from 501,048 barrels per day in August.
“Russian crude arrivals into India are up 12% month-on-month in September, as lower imports from China and Turkey made more supplies available to India. India has also raised imports from the Middle East to supplement its overall higher crude import demand as refineries ramped up runs,” said Serena Huang, Head of APAC Analysis at Vortexa.
The country imported a cumulative of 4.70 million barrels per day of crude oil in September, up from 4.17 million barrels per day in August, as per the data.
Going ahead, analysts expect Russian crude oil supplies to remain robust towards the beginning of the fourth quarter of the fiscal due to anticipated increase in the demand amid competitive pricing as compared to other suppliers.
“Russia will likely maintain its market share in India by keeping its crude attractively priced compared to its rival Middle East grades. The remaining of India’s crude import demand will be fulfilled by its term volumes with Middle East producers and spot barrels from Middle East and other Atlantic Basin suppliers,” Huang said.
She noted that imports of Russian and Middle Eastern crude will likely remain robust going forward, especially entering the fourth quarter of the fiscal when seasonal domestic demand is expected to pick up.
According to the data, India’s private refiners bought 1.80 million barrels of crude oil per day in September while public downstream companies imported 2.9 million barrels of crude oil.
The government is now expecting a term deal between Indian refiners and Russia for supplies of crude oil to conclude by next year. “They (Indian refiners) were talking jointly. I do not have an update as now everything has been overtaken by this change in crude oil prices. The discussion (with Russia) is ongoing,” a government official had earlier told reporters.
The official had noted that the two parties are negotiating a deal involving the number of cargoes, flexibility of the ports among others highlighting that the ‘market of 2024 is different from the market of 2023’. “Negotiating positions on both sides are different from what it was last year.”
Reports have earlier suggested that the country’s state-owned refiners are in discussions with Russia to secure a term deal for crude supplies on a fixed discount after the conclusion of a similar deal between Russia and Reliance Industries a few months back.
The country’s dependency on import of crude oil during April to August of the current fiscal rose to 88.1%, up from 87.8% in the corresponding period of FY24 amid rising demand and stagnant domestic production, as per data from the Petroleum Planning and Analysis Cell.
Upstream companies produced 12.1 million tonnes of crude oil during the period, slightly down from 12.3 million tonnes in the same period last fiscal. In August too, production fell marginally to 2.4 million tonnes from 2.5 million tonnes last year. Despite the government’s efforts to boost production and reduce dependency on imports, the production has remained stagnant over the last ten years.
India’s crude import bill increased 14.7% during the first five months of the current fiscal 2024-25 to $60.6 billion against $52.8 billion in the same period in FY24. The country imported 101.6 million tonnes of crude oil during April to August, up 3.2% from 98.4 million tonnes in the corresponding period of last fiscal, PPAC data showed.