India's Imports From OPEC At All-Time Low As Russian Oil Buy Peaks

Oil producers cartel OPEC's share in India's oil imports declined to an all-time low of 46% in April as purchases of cheaper Russian oil peaked, according to industry data.

Organization of the Petroleum Exporting Countries (OPEC) nations, mainly in the Middle East and Africa, had a 72 per cent share of all crude oil India imported in April 2022. This share slid to 46 per cent in April 2023, according to energy cargo tracker Vortexa, reported PTI.

OPEC made up for as much as 90 per cent of all crude oil India imported at one point of time but this has been sliding since Russian oil became available at discount in the aftermath of Moscow's invasion of Ukraine in February last year.

Russia continued to be the single largest supplier of crude oil, which is converted into petrol and diesel at refineries, for a seventh straight month by supplying more than one-third of all oil India imported. The imports from Russia are now more than combined purchases from Iraq and Saudi Arabia - India's biggest suppliers in the last decade, added the PTI report.

From a market share of less than 1 per cent in India's import basket before the start of the Russia-Ukraine conflict in February 2022, Russia's share of India's imports rose to 1.67 million barrels per day in April, taking a 36 per cent share.

OPEC supplied 2.1 million barrels per day out of 4.6 million bpd oil India imported in April. This gave it a 46 per cent share, according to Vortexa, reported PTI.

Indian refiners in the past rarely bought Russian oil due to high freight costs but now they are snapping up plentiful Russian cargo available at a discount to other grades as some Western nations rejected it because of Moscow's invasion of Ukraine.

The purchases from Russia in March were double of 0.81 million barrels per day (bpd) of oil bought from Iraq, which had been India's top oil supplier since 2017-18. Saudi Arabia has been pushed down to No.3 spot with 0.67 million bpd supplies, as per PTI report.

Month-on-month, purchases from Russia rose marginally from 1.64 million bpd of oil imported from the country in March. The UAE, which in March overtook the US to become the fourth largest supplier, sold 185,000 bpd, higher than 119,000 bpd oil sourced from the US, according to a PTI report.

"India's imports of Russian crude in April have set a new record once again, but the month-on-month increase has slowed and could possibly be peaking this month," said Vortexa's head of Asia-Pacific analysis, Serena Huang.

Increased competition for Urals from China will likely put a lid on upsides to India's imports of Russian crude, PTI report quoted.

"OPEC's crude market share in India has fallen to 46% last month, down from 72% a year ago, a multi-year low. OPEC may face an uphill battle in winning back the market share as refiners will ultimately be going for the crude that gives the highest margin, outside of fulfilling their term contracts," Huang said.