According to S&P Global Market Intelligence, India’s seaborne crude oil imports surpassed 4.8 million barrels per day in April. Russian-origin crudes hit 5% of India’s total seaborne imports in April for the first time, rising from under 1% throughout 2021 and Q1 2022.
“India’s seaborne crude oil imports surpassed 4.8 million barrels per day (b/d) in April, the highest on record, with higher Mideast and Russian volumes displacing cargoes from further afield, such as the U.S., Canada and West Africa," said a report by S&P Global.
Iraq remained the top supplier to India, with flows stable at a combined 1.2 million barrels per day (bpd). Strong Middle East arrivals offset volumes from West Africa and the US.
A strong Brent-Dubai exchange-of-futures-for-swaps (EFS) at the start of the year due to surging Brent futures prompted Indian refiners to turn more towards Dubai-pegged crudes from the Middle East. The share of crudes from the region increased to a record 73% in April, up from 69% in March and 67% in February, according to S&P Global.
As of May 9, almost 10 million barrels of crude loading from Russia—including 970,000 barrels of Kazakhstan’s CPC Blend—have discharged in India this month, the report said. Another 16 vessels with 13 million barrels are currently indicating India as their destination and are expected to arrive within the next four weeks. This includes one cargo each of CPC Blend and Siberian Light and the rest comprising Urals.
Yen Ling Song, associate director at S&P Global Market Intelligence said: “A rebound in domestic demand as well as stronger oil product exports likely spurred India’s crude import volumes. Refiners have been highly attracted to discounts for Russian-origin cargoes and India has been a major alternative destination for Urals crude that would typically have been sold to refiners in Europe."
“ Conversely, stronger demand from European end-users for other Atlantic Basin crudes—to replace Russian cargoes—pushed up these procurement costs, and India has instead turned more to the Middle East in the last month," she said.
Data from the Ministry of Commerce and Industry showed that the value of import of petroleum, crude and petroleum products in April 2022 stood at $20.18 billion, against $10.76 billion during the same period last year.
India’s turn towards Russia for meeting its energy requirements amid the ongoing Russia-Ukraine crisis has also been subject of diplomatic talks with the US initially pressurising India to avoid importing oil from Moscow. India, however, has stood its ground and said that import from Russia is meagre in its overall energy import basket and it would put its national interest first in striving to meet its energy requirements.
The supply concerns have kept global oil prices elevated since Russia invaded Ukraine in February. Although lockdowns in China and tightening monetary policies have of late weighed on oil prices, the supply fears still persist.
Around 5.50 pm, the July contract of Brent on the Intercontinental Exchange was trading at $109.09, higher by 1.53% from its previous close. Similarly, the June contract of West Texas Intermediate on the NYMEX rose 1.51% to $107.73 per barrel.
