India Turns to US Oil, Cuts Back on Russian Imports

25 Jul 2024 , 11:48 AM

According to news reports, India’s monthly oil imports from its largest supplier, Russia, decreased slightly in June while imports from the US increased to their highest level since February 2022.

With almost 80% of its oil requirements imported, India is the third-largest oil consumer and importer in the world. Most of the oil barrels that were scheduled to arrive in June were ordered by Indian refiners in May.

Based on data, Indian refiners collectively imported 1.98 million barrels per day (bpd) of Russian oil in June, a 3.7% decrease from the previous month. Nonetheless, the data shows that India’s imports of Russian oil increased by 1.2% annually during the first fiscal quarter that concluded on June 30.

According to news reports, Russia sold more crude in the June quarter as a result of disruptions caused by Ukrainian drone attacks against its refineries. However, the trader also stated that supply is predicted to decrease in the September quarter.

After western countries curtailed their purchases and imposed a series of penalties against Moscow for invading Ukraine, Russian oil appeared as an extra channel, and Indian refiners have been gorging on it.

Data indicated that imports from Iraq dropped to their lowest level since September 2020 in June, and Indian refiners have already curtailed their purchases of oil from certain traditional Middle Eastern exporters who boosted prices earlier this year.

Data indicated that the amount of Iraqi oil that Indian refiners received in June (762,400 bpd) was down 14.6% from a year ago and around 24% from May.

The broker explained that part of the reason for this was because Iraq did not have extra barrels to distribute. He also mentioned that Russian supply was easily accessible.

Asserting its adherence to the OPEC Declaration of Cooperation (DoC) deal, Iraq’s oil ministry said earlier this month that it will make up for any excess oil produced since 2024’s start.

According to the data, India’s monthly oil imports from Saudi Arabia increased by 9.7% following a drop to levels that were a 10-month low in May.

Saudi Arabia and the United Arab Emirates remain India’s top oil suppliers, with Iraq coming in second. The United States is now India’s fourth-largest supplier.

The amount of Middle Eastern oil in India’s crude basket has been reduced by imports from Russia, pushing OPEC’s percentage to the lowest.

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