India saw its crude oil imports from the Middle East rebound in September to pre-war levels amid higher volumes exiting the Strait of Hormuz, while competition from China for Russian oil resulted in declining imports from Russia.
India’s crude oil imports from the Middle East jumped to 2.8 million barrels per day (bpd) in September, up by 32% compared to August and the highest level since February, according to vessel-tracking data compiled by Reuters.
Middle Eastern oil accounted for 54% of all Indian imports last month as Indian refiners bought a growing number of spot cargoes as the Gulf producers have managed to sneak out increasingly higher crude volumes through the Strait of Hormuz via ship-to-ship (STS) transfers in the Gulf of Oman.
Russia remained the single largest crude oil supplier to India in September, but the imports of Russian oil fell by 14% from August to 1.8 million bpd last month. The share of Russian oil in India’s oil imports also dropped to 33.5% from 46.6% in August.
Deprived of Iranian oil, China has turned to Russian crude, competing directly with India for Russian oil supply.
India has been reducing its imports of crude oil from Russia, as economics have always been driving Indian refiners’ purchases, and the past few weeks haven’t been different.
India is scaling back imports of Russian oil as the price of Russia’s flagship Urals grade loaded in the Baltic ports has jumped and now nearly equals the prices of Middle Eastern crudes, whose availability has increased in recent weeks as flows through the Strait of Hormuz have rebounded.
Going forward, Indian refiners are likely to continue preferring higher volumes of Middle Eastern oil (when available), due to the pricing and the shorter voyages from the Gulf of Oman to India, a source with an Indian refinery told Reuters.
By Tsvetana Paraskova for Oilprice.com
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