New Delhi: Russia remained India’s leading oil supplier in November, despite a 4.5% decrease in imports from October, according to data from the union ministry of commerce and industry.
The $3.61 billion worth of crude imported from Russia accounted for 30% of India’s total $11.86 billion oil imports. Russian oil imports increased 32.82% from $2.72 billion seen in November 2022.
Before the Ukraine crisis, Russian oil constituted only 2% of India’s oil imports with the top supplier being Iraq, followed by Saudi Arabia and the UAE. Since the conflict’ in February 2022, Russia has become the top supplier due to deep discounts of over $30 per barrel, although these have recently reduced it to below $5 per barrel.
India’s oil imports from Iraq, the second largest supplier, grew by 48.91% to $2.84 billion. Imports from Saudi Arabia grew 0.33%, while those from the US, and the UAE declined 28.01% and 75.17% respectively.
Imports from Russia are likely to continue at the current momentum, although supplies have inched lower, despite volatility in the energy market.
A report by S&P Global Commodity Insights earlier this month said that India’s demand for Russian crude remains resilient despite Red Sea threats. Russian oil imports are expected to stay robust, potentially accounting for 35-45% of India’s total crude imports, assuming prices remain competitive.
Alternative shipping routes, such as the Cape of Good Hope, might be used by the US and Latin American suppliers in response to these developments.
“Despite a series of attacks on shipping in the Red Sea, India’s crude imports from Russia remain unaffected so far. According to CAS (commodities at sea) data, as of 27 December, the Red Sea route remains the preferred option for traders supplying Russian crude to Indian refiners, with Russia, holding a substantial volume of oil at sea, with a minimum of 43.7 million barrels destined for India,” the report said.
The March contract of Brent on the Intercontinental Exchange (ICE) was currently trading at $79.36 per barrel, higher by 0.33% from its previous close.
Crude oil prices surged amid escalating Middle East tensions, the decline in the US oil stocks, and higher global oil demand forecasts, Rahul Kalantri, vice president, commodities, Mehta Equities Ltd said.
“Pakistan launched retaliatory airstrikes over Iran and killed at-least nine people escalating tensions in the Middle East. The U.S. crude oil inventories declined around 2.5 million barrels against expected decline of 0.6 million barrels for the week ended on January 12 and supported crude oil prices,” he said.
Oil prices also gained after the International Energy Agency stated in its monthly report that it expects oil demand to grow by 1.24 million barrels per day in 2024, up 180,000 barrels from its previous projection.
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Published: 19 Jan 2024, 04:12 PM IST