India’s crude oil imports from Russia fell by 6.5% in July to 1.81 million barrels per day from 1.94 million barrels per day in June as Russian refineries ramped up runs to meet the country’s own summer demand, data sourced from Vortexa showed.
“Russia remained as the top crude supplier to India in July, although import volumes were down month-on-month. Higher supplies from Saudi Arabia and Mexico partially offset declines from Russia, Iraq and Nigeria, leading to a marginal decline in the country’s total crude imports,” said Serena Huang, Head of APAC Analysis at Vortexa.
Saudi Arabia and Iraq remained the other top suppliers of crude oil to India last month. While exports from Saudi Arabia increased by 33.4% to 606,000 barrels per day on month, Iraq’s supplies to the country registered a fall of 32.8% at 603,000 barrels per day compared to June.
The country imported a cumulative of 4.48 million barrels per day of crude oil in July, marginally down from 4.56 million barrels per day in June, as per the data.
Russia’s share in the country’s total imports during the period declined to 40% from 42% in June. Iraq contributed to 13.5% of India’s total crude oil imports in July against 17.5 the previous month while Saudi Arabia accounted for 13.5% of imports, up from 9.9% in June.
“Russia’s crude exports saw a near 14% month-on-month decline in July, as domestic refineries ramp up runs to meet the country’s summer demand,” Huang noted.
Going ahead, analysts expect Russian crude oil supplies to decline as the Russian refiners gear up to meet their domestic demand. Moreover, shutdowns of many Indian refineries for maintenance is further expected to slow down India’s crude oil imports.
“Russian crude arrivals into India are expected to decline in August/September as a result. With several Indian refineries entering into planned maintenance this quarter, India’s crude imports could slow, which would see a decline in the country’s imports of its Middle Eastern crude as well,” Huang said.
According to the data, India’s private refiners bought 1.67 million barrels of crude oil per day in July while public downstream companies imported 2.90 million barrels of crude oil.
The country’s dependency on import of crude oil during the first quarter of the current fiscal rose to 88.8%, up from 88.3% in the Apr-Jun quarter of FY24 as the domestic production remained stagnant, as per data from the Petroleum Planning and Analysis Cell.
Upstream companies produced 7.3 million tonnes of crude oil during April to June, unchanged from the same quarter last fiscal. In June too, production remained muted at 2.4 million tonne from last year. Despite the government’s efforts to boost production and reduce dependency on imports, the production has remained stagnant over the last 10 years.
So far, the country’s upstream sector companies have explored only 10% of the sedimentary basin. The government is now aiming to increase the explored area to 16% by the end of 2024 after the end of upcoming rounds of bids under Open Acreage Licensing Program.
The government also intends to increase the country’s exploration acreage to 1 million square kilometers by 2030.