NEW DELHI: India’s import of crude oil reached a multi-year high of 4.9 million barrels a day in January and increased 13% from December 2023, according to data from energy cargo tracker Vortexa. Indian refiners cumulatively had imported 4.3 million barrels a day in December.
The country imported 1.20 million barrels a day of Russian crude in January, down by 9% to from 1.32 million barrels a day imported in December 2023 as it continues to face issues in the delivery of Sokol grade of crude oil from the latter, as per Vortexa. Iraq, on the other hand, filled in for lacking Russian supplies and came close to becoming the top supplier with a 13% rise in its supplies to 1.11 million barrels a day in January.
“There has been no Sokol crude being discharged in India in January, the second month in a row,” said Serena Huang, analyst at Vortexa. The disruption in Sokol imports is due to US sanctions on Sun Ship Management, whose vessels have been largely involved in the transport of Russian Sokol crude to India, she added.
While Iraq holds its market share in India steady at 23%, share of Russian imports has fallen to 25% this month from 31% in December.
Imports from Russia were the lowest since January 2023 when the imports stood at 1.27 million barrels a day. Russia had become India’s top supplier of crude oil after the country started offering heavy discounts on its crude post the outbreak of Russia-Ukraine war. Since then, it has maintained its position as the country’s top supplier. However, the trend is seen reversing as the country continues to face issues in the delivery of Russian crude.
Furthermore, at least 12 tankers are seen waiting near Singapore’s EOPL and Yeosu STS area carrying Sokol crude amid lack of buying interest.
“Only two Aframax tankers are headed to India, and we see at least 12 tankers waiting near Singapore’s EOPL and Yeosu STS area,” Huang said.
Analysts do believe that Russian supplies will bounce back after the onset of Russian refinery maintenance in April-May.
“The onset of Russian refinery maintenance in April-May 2024 will unlock some additional 500-600,000 bpd of crude and those months will see oil exports peaking. So another run towards India buying 2 million barrels a day of Russian crude in the spring months is highly possible,” Viktor Katona, lead crude analyst at Kpler had told FE. “However, now in the winter period when Russia is maximizing its own refining and has less crude to export, outflows will remain capped,” he said.
Imports from Saudi Arabia also fell in January and stood at 659,000 barrels a day compared with 668,000 barrels a day last month. Moreover, limited crude exports from Venezuela restricted Indian refiners from buying Venezuelan crude, analysts say.
“Venezuelan crude imports into India have remained low, with only one VLCC discharged so far this month amid limited Venezuelan crude exports and competition for the cargoes amongst buyers,” said Huang.
India also saw nil imports of US crude this month compared to 140,000 bpd imported in December of last year.
Global crude prices that have remained subdued for sometime now saw an increase Monday morning touching $84 a barrel after the escalation of tensions in the Middle East region. This has again created apprehensions in the market over supply disruptions from the region that accounts for more than one-third of global crude supply.
Source: The Financial Express
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