With international crude oil prices rising, local consumption of petroleum products returning to pre-pandemic levels and US calls for sanctions against Russia, Iran could return as a major oil partner for India.
With international crude oil prices rising, local consumption of petroleum products returning to pre-pandemic levels and US calls for sanctions against Russia, Iran could return as a major oil partner for India.
On the sidelines of the Shanghai Cooperation Organization (SCO) summit, discussions are expected between Indian Prime Minister Narendra Modi and Iranian President Ebrahim Raisi. revival of oil imports from Iran. India stopped buying oil from Iran in FY19, after the US ended an exemption that allowed import of crude oil from Iran without sanctions. Iran was India’s third largest source of crude oil in the years immediately before the sanctions. In fact, Iran was the second largest source after Saudi Arabia between FY07 to FY09. Interestingly, after Iran’s exit, India filled the void by importing oil from the US, the country that initiated sanctions. However, in FY23, the US’s share in India’s oil imports halved and Russia became the third largest source. Russia’s share in India’s crude oil imports Was close to 14% in FY23. Notably, the last time Russia’s share was so high was in the late 1980s when it was still part of the Soviet Union. With the rise in international crude oil prices, local consumption of petroleum products has returned to pre-pandemic levels and America calls for sanctions against RussiaIran may return as a major oil partner for India.
import share
The table lists the % share of a country in India’s total crude oil imports. Iran was the third largest source before the sanctions in FY19. Currently, most of India’s oil is being imported from Iraq and Saudi Arabia, with Russia’s share moving ahead of the US. In the table, the years are truncated: 88 corresponds to FY1988, 00 is FY2000 and so on.
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In the 1990s, Nigeria and Kuwait were the major sources of oil.
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The United Arab Emirates, which was the second largest source in the 1990s, was followed by a decline. However, recently it has intensified again.
Data were not available between FY01 and FY05
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consumption spikes
The table lists the consumption of select petroleum products (in thousand metric tonnes) in India between FY18 and FY23.
In FY23, consumption has gone back to pre-pandemic levels
Data pertains to April-August months of each year
crude shock
The chart shows monthly average crude oil prices (Indian Basket) in $/barrel between FY01 and FY23.
Source: UN Comtrade, PPAC
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