Purchase from Saudi Arabia down a third sequentially in July
The United Arab Emirates and Iraq have started regaining their share in India’s oil import basket as the world’s largest oil exporters Saudi Arabia and Russia plan to keep their production low to boost the prices. Russia, however, continues to hold 42% of the share.
While the UAE increased its oil exports to India by 76% to 290,000 bpd in July from 165,000 barrels per day (bpd) in June, Iraq raised its share by 62,000 bpd to 891,000 bpd in July, according to energy cargo tracker Vortexa.
Saudi Arabia, which extended its voluntary output cut by one million bpd for another month to include August, saw a significant decline of 33% in its export to India to 484,000 bpd in July.
“The changes in import volumes are market-driven. India’s imports of Saudi crude will likely remain subdued for some time, with the extension of Saudi’s production cuts,” said Serena Huang, Vortexa’s head of APAC analysis.
Russia’s share in Indian oil import basket is likely to have peaked in July with a 5% rise sequentially as it has also announced cut of 500,000 bpd in exports in August.
“Due to the cuts by Russia, volumes are expected to decline. So, the retention of 42% share looks difficult owing to lower production from August 1. In case the discounts decline, the volumes would also fall,” said Prashant Vasisht, vice president and co-head of corporate ratings at ICRA.
While the Saudi-led Organisation of the Petroleum Exporting Countries (OPEC) and an alliance of oil producers headed by Russia, known as OPEC+, decided to cut oil production in June, both UAE and Iraq have reportedly increased their outputs.
The UAE got its production quota revised upward by 200,000 bpd in 2024 to 3.2 million barrels. Iraq and some other countries like Iran and Angola have raised their production offsetting some of the Saudi reduction.
“Coupled with lower supplies from Russia, Indian refiners are turning to other crude exporters to supplement their feedstock, which explains the uptick in imports from Iraq and UAE, which we expect to continue in the short to mid-term,” Huang said.
Source:financialexpress.com