In a significant twist of events, India witnessed a sharp 36% decline in its crude oil imports from Saudi Arabia during the month of September. This abrupt shift in India’s energy supply dynamics was illuminated by data from Vortexa, a prominent energy cargo tracking entity.
The slump in crude oil imports from Saudi Arabia closely follows the announcement of an extended production cut, maintaining a reduction of one million barrels per day (bpd) until December 2023. Notably, Russia also prolonged its voluntary export cut by 300,000 bpd, effective until the year’s end.
For the month of September, Saudi Arabia contributed a mere 547,000 bpd of crude oil to India, a stark contrast to the 855,000 bpd from the preceding month. Meanwhile, India’s imports of crude oil from countries such as Russia and Iraq displayed marginal increases.
Russia retained its supremacy as India’s foremost crude oil supplier in September, furnishing a substantial 1.5 million bpd. Russian crude oil accounted for 38% of India’s overall oil imports during the same period.
A noteworthy development is that Russia has emerged as a pivotal source of crude oil for India since Moscow’s involvement in Ukraine back in February 2022. This transition has propelled Russia ahead of Saudi Arabia and Iraq, solidifying its position as India’s primary crude supplier since October 2022.
The divergence of Russian oil toward Asian nations, especially India and China, has been a noticeable trend, attributed to a series of sanctions imposed by the European Union (EU) and the United States following the Ukraine invasion. However, it’s worth noting that discounts from Russia have dwindled in recent months, consequently pushing the cost of oil beyond the $60 per barrel threshold.
India primarily benefits from discounts on Russian Urals, the sour grade of crude, which constitutes a substantial share of imports from Moscow. In September, India imported 1.1 million bpd of Russian Urals.
Apart from Russia, India’s crude oil imports also surged from Iraq and the United States in September. Imports from Iraq rose to 946,000 bpd, up from 854,000 bpd in August, while crude oil imports from the U.S. reached 217,000 bpd in September, compared to 166,000 bpd in the previous month.
Notwithstanding the decline in imports from Saudi Arabia, India’s overall crude oil imports remained stable on a month-on-month basis in September. Total imports for the month stood at 4.19 million bpd, a slight dip from 4.34 million bpd in the preceding month. India sourced its oil from a diverse array of nations, including Russia, Saudi Arabia, Iraq, the United States, the UAE, and others.
Data from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC) indicated that India’s crude oil imports have maintained consistency in the current fiscal year compared to the previous year. India’s crude oil imports amounted to 98.4 million metric tonnes (MMT) in the first five months of the current fiscal year, marginally lower than the 99 MMT during the same period last year.
Intriguingly, these developments in India’s crude oil import landscape underscore the nation’s adaptability in the face of global energy dynamics, positioning itself strategically amidst shifting oil supplier dynamics.
