Commodities News

Crude oil imports rise to 4-year high in March

Shipments from Russia remain elevated, but down on year.

India’s crude oil imports rose to 5.2 million barrels per day in March, the highest level since early 2020 amid increased refinery runs by the Indian refiners, an analysis of the data provided by intelligence firm Kpler showed. Imports were 11% higher than February volumes and up 4.5% from 4.9 million barrels a day in March 2023.

Additionally, the country’s crude oil imports from Russia rose to 1.8 million barrels per day in March, highest after the July of last year primarily on the back of higher discharge of Urals, according to the data. Imports were, however, slightly down from 1.87 million barrels per day in the same period a year ago.

India’s strong crude imports is partly a signal of refiners ramping up runs, although we have also seen a slight uptick in the country’s onshore crude inventories this month,” said Serena Huang, analyst at Vortexa. “India’s imports of Russian crude will likely remain robust in the near-term,” she said.

Post the outbreak of conflict in Ukraine, Russia has emerged as the top supplier of crude oil to India on the back of healthy discounts it offered. Despite retaining its position at the top, Russia’s share in total imports of the country has come down to 34.5% in March from the earlier peak of 45% in May 2023 when the purchase volume stood at 2 million barrels per day. Russia’s share has however increased from 32.5% in February.

Amid all Russian grades, Urals discharges to India remained at the highest at around 1.5 million barrels per day, up from 1.1 million barrels per day in February. Now as the western sanctions on Venezuela kicks in beginning April 18, Russian supplies are once again expected to fill in for the lack of Venezuelan crude India started purchasing after sanctions eased last December.

Imports from Iraq too surged significantly from last month registering an increase of 66% to 1.3 million barrels per day. Iraqi imports in March were the highest since 2020, suggesting that Indian refiners have returned to their traditional suppliers of oil in West Asia.

India’s growing reliance on supplies from West Asian nations can be attributed to many reasons including the narrowing discounts on Russian crude, rising uncertainty of sanctions on tankers by the United States for violation of G7 price cap, and increased freight cost amid the Red Sea crisis.

“With freight from the Atlantic Basin being prohibitively expensive again, Indian refiners needed to turn towards option closer to home, leading to the high Iraqi crude imports,” Katona had earlier said.

While March saw a decline of 18% in Saudi Arabia oil imports at 701,514 barrels per day from February, imports from the United Arab Emirates (UAE) grew 39% to 435,283 barrels per day, highest ever since June 2022.

Despite the G7 price cap of $60 per barrel, Russian oil grades are now being sold at a higher price. Discounts on Russian flagship grade Urals have come down to $3-$4 per barrel, as per Viktor Katona, lead crude analyst at Kpler, down from the earlier discount of $8-$10 per barrel.

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