LatAm, US shares in India’s oil imports increase; Middle East, Africa down
By Nidhi Verma
NEW DELHI (Reuters) – India’s crude oil imports hit a four-month high in August, recovering from the nearly one-year low in July, with refiners buying additional barrels mostly from Latin America and from the United States, oil tanker data from commercial sources shown.
The world’s third-largest importer and consumer of oil bought 4.2 million barrels per day (bpd) last month, as some refiners plan to increase cycles in anticipation of pent-up demand around festival season.
The two regions, the United States and Latin America, accounted for about a fifth of India’s imports in August, with refiners reserving long-haul crudes in late May and June to take advantage of arbitrage. This has led to a drop in the share of oil in the Middle East and Africa, according to the data.
Indian imports from Latin America, driven by an increase in Mexican supplies, reached 414,450 bpd of oil in August, the highest since December, while shipments from the United States peaked in five months of 419,100 bpd, according to the data.
The sources declined to be identified as they are not authorized to speak to the media.
“Long-haul WTI-linked oil from the Americas was economical for Indians because the economics of arbitrage were favorable. At the end of May, WTI-linked crudes were trading at a discount of around $ 3 / bbl per. compared to Brent, ”said Ehsan Ul Haq, analyst. with Refinitiv.
Latin American heavy oil is available at a very favorable price compared to WTI, which makes it even more attractive, he said.
Indian imports in August were 23% higher than in the previous month, when refiners shut down units for maintenance.
Indian refiners limited processing of crude in August because they had high stocks of diesel and exports were unprofitable. [O/INDIA1]
Domestic refiners resumed diesel exports as prices in overseas markets improved due to higher demand from the West.
This would free up diesel storage and help increase crude flows and imports in the coming months, a source from one of the state-run refiners said.
The share of Middle Eastern grades in India’s oil imports in August fell to 61.8% from 64.7% the previous month, while that of African oil fell to 14.1% from 16 , 7%.
This caused OPEC’s share of oil in India’s overall imports to drop to 67.7% from 77.6%. For April-August, the first five months of this fiscal year, the group’s share fell to its lowest.
Share of various regions in India’s oil imports https://graphics.reuters.com/INDIA-OIL/mypmnoadgvr/Pasted%20image%201632157889154.png
OPEC’s share of India’s oil imports drops to record high https://graphics.reuters.com/INDIA-OIL/gkplgwlrdvb/Pasted%20image%201632158251466.png
Last month Iraq remained India’s top oil supplier, followed by Saudi Arabia. The United States climbed four notches to become the third largest supplier, while Kuwait moved from No.6 to No.5 in July. The United Arab Emirates remained in fourth position while Nigeria fell three notches to place sixth.
(Reporting by Nidhi Verma; Editing by Florence Tan and Subhranshu Sahu)