Indian refiners continued their buy momentum for medium bitter grades from its two largest buying and selling companions, Russia and Iraq, throughout Could 2024 as crude oil flows from one other high provider, Saudi Arabia, declined resulting from increased costs.
Analysts and commerce sources indicated that value arbitrage favours Russia in opposition to Saudi Arabia by round $5 per barrel. The world’s largest crude oil exporter has been elevating the official promoting value (OSP) of its medium bitter grade, Arab Mild, to Asia for 3 consecutive months working into June because it makes an attempt to tighten the oil market.
Based on power intelligence agency Vortexa, India imported increased volumes from Russia, Iraq, the UAE and the US final month in comparison with April 2024.
Russia nonetheless on high
Crude oil imports from Russia fell marginally to 1.72 mb/d in Could 2024 (April: 1.75 mb/d) on a month-to-month foundation, and by 13 per cent y-o-y. Ural shipments stood at 1.44 mb/d final month in comparison with 1.56 mb/d in April 2024.
Vortexa’s Head of APAC Evaluation, Serena Huang instructed businessline, “Russia continues to be the highest crude provider for India in Could. While imports of Russian crude are down barely in Could in comparison with April, Could’s volumes are nonetheless the second highest in comparison with final July.”
An official with a home refiner mentioned that value is a significant factor. Russian barrels proceed to be extra viable in comparison with Saudi Arabia. “Russia-India crude commerce is one industrial alternative each side can’t ignore. Regardless of problems with cost and vessels, it has labored, which signifies the inherent worth in it for each side,” the official defined.
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Huang identified that Russian crude will seemingly proceed to be priced at a reduction to Center Japanese grades, given the significance of India and China as vacation spot markets and the shortage of other markets. Each private and non-private sector refiners continued their import momentum from Russia, albeit at a decrease quantity in comparison with April 2024.
Public refiners akin to Indian Oil Company (IOC), Bharat Petroleum Company (BPCL) and Hindustan Petroleum Company (HPCL) imported 1.04 mb/d crude oil, marginally down from 1.05 mb/d in April 2024. Nevertheless, imports on an annual foundation had been down 16 per cent.
Non-public refiners, Reliance Industries (RIL) and Rosneft-backed Nayara Power, imported round 6,79,000 barrels b/d from Russia in Could 2024 in comparison with 6,95,000 b/d in April. Shipments had been down by 5 per cent y-o-y.
Extra crude from Iraq, US
Crude oil imports from Iraq rose by 16 per cent m-o-m and 27 per cent y-o-y to round 9,36,000 b/d. Equally, imports from the UAE rose by 7 per cent m-o-m to three,40,000 b/d. In Could 2023, India imported round 1,90,000 b/d from the UAE. The FTA and Rupee commerce settlement additionally helped enhance volumes.
Nevertheless, cargoes from Saudi Arabia fell by 10 per cent m-o-m to round 6,06,000 b/d. However, imports had been increased by 11 per cent on an annual foundation. “In the meantime, with Center Japanese crude provides remaining tight, exporters akin to Saudi Arabia have priced their medium-sour grades at increased OSPs in comparison with earlier month, driving refiners to show to Russian crude provides the place accessible,” Huang mentioned.
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Crude oil shipments from the US rose by 7 per cent m-o-m to round 3,40,000 b/d. In Could 2023, the imports stood at round 1,35,000 b/d. Commerce sources mentioned that imports had been of sunshine candy grade resulting from weak market fundamentals amid refinery outages in Europe and the US lowered demand, which coupled with excessive provide availability, particularly from US exports, and higher value arbitrage in comparison with West Asian grades.
Total, India’s crude oil imports fell marginally to 4.54 mb/d in Could 2024 (April: 4.58 mb/d), however had been increased by 1.6 per cent on an annual foundation.