As per the tanker data released by trade sources, India’s oil imports from the middle east countries hit a 25-month low in May 2021. The government had directed refiners to explore alternate supplies as the Organisation of the Petroleum Exporting Countries (OPEC) did not facilitate the government’s request to relax supply restrictions.
The petrol and diesel prices in the country have hit record highs. India is the third biggest importer of crude oil globally, and it imported nearly 4.2 million barrels of crude oil per day last month. However, this number is just short of its previous month and 31.5% higher on a year-on-year basis.
The share of the middle east region fell to 52.7%, which is the lowest since April 2019, and it was 67.9% in April 2021. The data showed that the imports from Saudi Arabia were reduced by about a quarter compared to last year. The crude imports from the United Arab Emirates (UAE) fell by 39% in May 2021.
These developments are due to the decision of the Indian state refiners to receive less oil from the OPEC countries last month. However, the refiners increased their supply of crude oil from the Mediterranean region, the United States of America and South America.
In March 2021, The Indian refineries imported a large volume of gasoline-rich oil from the United States, expecting an increased demand for fuel in the following months. However, lockdown restrictions placed in several states hindered the demand for petrol and diesel in April and May.
Nigeria benefited from the decision of Indian refiners to look for alternative suppliers to the middle east countries. As a result, it was the third-biggest supplier of crude oil to India this May. This is attributable to the growing demand for light crude.
The private refiners Nayara Energy and Reliance Industries raised their heavy oil imports from Canada. They imported at a record rate of 2,44,000 barrels per day, accounting for about 6% of the Indian imports. The imports from Kazakhstan were also on the higher side as attractive discounts were on offer.
It is interesting to see if the decision of the state refineries to look for alternate suppliers will make OPEC countries increase their supply in the coming days.
For any clarifications/feedback on the topic, please contact the writer at vineeth.nc@cleartax.in
Engineer by qualification, financial writer by choice. I am always open to learning new things.
