Despite recovering energy flows out of the Middle East, India’s fuel consumption last month fell by 3.7% from May to a total of 19.24 million metric tons, Reuters has reported, citing data from the country’s oil ministry.
Fuel consumption was also down on the year in June, by 3.1%, the data showed. However, gasoline sales were up on the year, by a substantial 7.4%, even though they were down on the month, by 3.2%. Reuters suggested sales of gasoline to Russia played a role in the sales increase, as Ukrainian drone attacks on Russian refineries caused fuel shortages. Diesel sales from Indian refineries were also higher in June than a year earlier, by 6.2%, although they were down on May, by 1.4%.
India is the third-largest oil importer in the world and, as a result, one of the nations hardest hit by the supply tightness caused by the closure of the Strait of Hormuz earlier this year. Before the Iran war began, India held 107 million in crude oil inventories as of the end of February—the highest end-month level for the previous 12 months.
The war depleted inventories in March and April, before Indian refiners started raising imports from Russia and turning to Venezuela – both sources of supply that don’t need to transit the Strait of Hormuz. This helped secure supply for the domestic market, but it did not prevent price hikes, a total of four in a month.
India imported a record high of 5 million barrels per day of crude oil in June, more than half of which – 2.6 million bpd – came from Russia, thanks to the U.S. waiver on sales of Russian oil already loaded on tankers. That waiver has now expired, but with exports from the Middle East ramping up, India should be able to secure the crude it needs for the coming months.
By Irina Slav for Oilprice.com
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