India’s crude oil imports are poised for recovery in November with key refineries, including Mangalore, Kochi, and Mathura, going on stream after maintenance, according to Kpler, global real-time data and analytics provider. The agency projects India’s refinery runs to rise by 250,000 barrels per day month-on-month to 5.41 million barrels per day during the month, the highest since July.
In October, the country’s imports had fallen to its lowest over a year to 4.34 million barrels per day. “November is expected to see a rebound to 4.87 million barrels per day, supported by stable domestic production at around 590,000 barrels per day,” Kpler said in its report.
It noted that Russia remains the largest crude oil supplier to the country, though imports are unlikely to exceed 2 million barrels per day in the near term. “This is due to higher Russian refinery runs as autumn maintenance concludes and less drone activity impacting its facilities.”
Iraq is strengthening its position as the second largest supplier of crude oil to India given Hindustan Petroleum Corp’s term deal with Iraq’s State Organization for Marketing of Oil (SOMO).
Brazil is emerging as a notable source for medium sour grades to India, with 185,000 barrels per day of crude oil arriving in November, the second-highest monthly volume recorded, as per Kpler data.
The country has also been diversifying its crude oil sources particularly with Brazil amid a rising geopolitical uncertainty that impacts supply. Union oil minister Hardeep Singh Puri on multiple occasions has highlighted that oil availability and supply is increasing and the global oil market situation, as a result of that, should calm.
“Shifts in global crude dynamics are also evident as Indian Oil Corp opts for discounted US WTI (West Texas Intermediate) barrels over its usual Nigerian grades, driven by weak European demand and stagnation in China. With differentials narrowing, India’s post-maintenance activity highlights its adaptability in securing competitively priced supplies amidst evolving market conditions,” the report said.
The country’s crude import bill increased 7.6% during the first seven months of the current fiscal 2024-25 to $81.7 billion against $75.9 billion in the same period in FY24, data from the Petroleum Planning and Analysis Cell showed. The country imported 140.2 million tonnes of crude oil during April to October, up 3.5% from 135.4 million tonnes in the corresponding period of last fiscal.
India’s dependency on import of crude oil during April to October of the current fiscal rose to 88.1%, up from 87.6% in the corresponding period of FY24 amid rising demand and stagnant domestic production.
Despite the government’s efforts to boost production and reduce dependency on imports, the production has remained stagnant over the last ten years and the country’s dependency on imports has only increased. However, analysts now expect the domestic oil and gas output from the state-owned leading oil producer Oil and Natural Gas Corp to increase, after years of muted growth.
“As regards KG-98/2 field, currently, oil production is at 25,000 bpd and ONGC expects it to ramp up to 45,000 bpd by end of FY25. KG gas production is likely to reach 10 mmscmd by end-FY25 from the current ~2 mmscmd,” said Elara Capital adding that the company is guided for oil & gas production of 44.9 million tonnes of oil equivalent and 46.2 million tonnes of oil equivalent in FY26 and FY27 respectively.
In a bid to increase the country’s oil output, Indian upstream companies are now more open to overseas investments and venturing to newer locations, analysts say.