Soaring Imports Push India’s Crude Stocks to Near 1-Year High

India’s strategic and commercial crude oil inventories have jumped to a nearly one-year high as the world’s third-largest crude oil buyer boosted its imports to a record high in June.

As at the end of June, India’s crude oil stocks held in strategic, commercial, and refinery storage had increased to 104 million barrels, up from 90.5 million barrels at the end of April, according to data from commodity intelligence provider Kpler cited by Indian outlet Economic Times.

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 turn to Venezuela—both sources of supply that doesn’t need to transit the Strait of Hormuz.

By June, stocks were recovering and nearing the level from before the Iran war.

India imported a record high level of 5 million barrels per day (bpd) of crude oil in June, more than half of which – 2.6 million bpd – from Russia, thanks to the U.S. waiver (now expired) on sales of Russian oil already loaded on tankers.

Yet, India wants to lower its crude import bill, protect public finances, and become more resilient to supply shocks such as the Middle East conflict that crippled supply from the Strait of Hormuz. That’s why it is looking to boost energy security by diversifying import sources and expanding its strategic storage.

Currently, India’s underground Strategic Petroleum Reserve storage has a total capacity of 5.33 million metric tons of crude oil, equal to only 39 million barrels of crude oil, or eight days’ worth of India’s oil consumption.

India’s storage of just about a week of its roughly 5 million bpd of consumption, is well below the SPRs of many other large oil consumers, which exposes New Delhi’s vulnerability to sudden supply shocks.

By Charles Kennedy for Oilprice.com

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