Lower crude oil shipments from India’s top suppliers, Russia and Saudi Arabia, who collectively account for more than half of the cargoes, dragged down India’s imports for the second consecutive month during August 2024.
According to energy intelligence firm Vortexa, India’s crude oil imports last month fell by 4 per cent Y-o-Y to 4.18 million barrels per day (mb/d). The fall in shipments on a monthly basis was steeper at 7 per cent. The numbers are on a provisional basis.
Analysts and trade sources attributed the decline in crude oil cargoes to the world’s third largest importer from the world’s two top exporters due to lower production and domestic demand.
India’s imports of Iraqi crude grew M-o-M, while imports of Saudi crude fell in the same period. Imports of Russian crude are also down on a monthly basis in August, though smaller in percentage than Saudi, but higher in absolute volume, Vortexa’s Head of APAC Analysis, Serena Huang, told businessline.
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On import momentum going ahead, Huang said “India’s imports of Russian crude are down in August, and could remain flat to lower in September off the back of lower Russian crude exports in August. We expect imports of Russian crude to rebound in October, with supplies of Russian crude returning.”
Besides, upcoming refinery maintenance in India will also have a bearing on crude supplies. For instance, state-run Bharat Petroleum Corporation’s (BPCL) Kochi refinery will undergo maintenance during September-October and Bina refinery during August-September 2024.
More crude from Iraq & the US
While imports from Russia and Saudi Arabia declined, the cargoes from Iraq, the UAE and the US rose on a monthly basis.
Crude oil imports from Russia fell by around 17 per cent M-o-M to 1.65 mb/d during August. On an annual basis, the shipments were higher by more than 12 per cent. In the case of Saudi Arabia, the imports fell by 22.5 per cent M-o-M and 38 per cent Y-o-Y to around 505,147 barrels per day (b/d).
On the other hand, crude oil imports from Iraq—India’s second largest supplier—rose by almost 14 per cent M-o-M to 778,262 b/d last month. On an annual basis, the shipments were down by 10 per cent.
Crude oil cargoes from the UAE, which has recently inked a free trade agreement with India, rose by 11 per cent M-o-M and 36 per cent Y-o-Y to around 371,195 b/d in August 2024. Similarly, in the case of the US as well, the cargoes rose by 60 per cent M-o-M to 367,119 b/d. On an annual basis, the imports more than doubled.
Cargoes decline
Jay Maroo, Vortexa’s Head of Market Intelligence & Analysis (MENA), in a September 4 commentary said the cumulative combined crude/ condensates exports from the Big-3 (Saudi Arabia, Russia and the US) stood at 12.7 mb/d in August 2024, down almost 700,000 b/d M-o-M.
Saudi exports fell somewhat predictably in August given that the month falls within the period of seasonally high domestic oil demand (crude and fuel oil direct burn for power generation), he added.
Saudi exports may move higher in the coming weeks, as Saudi domestic power generation needs will wane, potentially freeing up supply for exports. Another crucial factor to bear in mind is that from October, OPEC+ production cuts could begin to unwind,” he projected.
Russia’s exports (excluding Kazakh grades) marginally dropped to 3.1 mb/d, the lowest monthly total since November 2023. Decline in exports in August are largely a function of expected lower production and exports from Russia due to seasonal field maintenance, Maroo said.
“Going forwards, one factor to bear in mind is that, unlike Saudi Arabia, Russia does not have many other buyers of its crude if Chinese import demand falters – this could cap Russian exports to some extent,” he added.
