The share of Middle East crude oil in India’s imports hit a 25-month low in May
According to tanker data provided by trade sources, the share of Middle Eastern crude oil in India’s oil imports fell to a 25-month low in May, and refiners have sought alternative energy sources to respond to the government’s call for diversified supply.
After the Organization of the Petroleum Exporting Countries (OPEC) and its allies (led by the largest exporter Saudi Arabia) ignored India’s calls to ease supply restrictions, India, the world’s third-largest oil importer, instructed refiners to diversify sources of crude oil in March.
According to data, the third-largest economy in Asia imported about 4.2 million barrels of oil a day in May, slightly lower than the previous month, but an increase of about 31.5% over the same period last year. The Middle East’s share fell from 67.9% in April to 52.7%, the lowest level since April 2019. Imports from Saudi Arabia (the second largest supplier of India after Iraq) fell by about a quarter from the same period last year, while imports from the United Arab Emirates (the UAE fell from third to seventh in April) This is a decrease of 39%.
Previously, Indian state-owned refiners nominated to reduce oil imports from Saudi Arabia in May.
The decline in oil purchases in the Middle East has brought OPEC’s share of India’s oil imports to its lowest level in history.
To replace oil in the Middle East, refiners increased imports from Latin America, the United States, and the Mediterranean.
Ehsan Ul-Haq, chief analyst of Refinitiv Petroleum Research and Forecast, said that Indian refiners bought more gasoline-rich US oil in March, and it is expected that domestic gasoline demand in India will continue to recover in the coming months.
Due to strong demand for light oil, Nigeria’s ranking improved by two levels, becoming India’s third largest supplier in May.
However, Indian private refiners Reliance Industries and Nayara Energy increased their purchases of Canadian heavy oil to a record 244,000 barrels per day, equivalent to about 6% of India's total imports.
UlHaq stated that India bought Kazakhstan’s CPC blended oil and Canadian oil because of its attractive discounts compared to Brent crude oil and WTI crude oil.
Compared with the government’s preliminary data, data on tanker arrivals showed an increase in imports because the hurricane off the coast of India last month delayed the unloading of cargo.