OPEC’s share of India’s oil imports for the 2021/22 financial year remained almost flat year on year, arresting sharp declines over the the past six years, as refiners snapped up short-haul crude from the middle east to counter rising global prices.
Total crude imports by the world’s third biggest oil importer and consumer rose by an annual 7.2% to 4.26 million barrels per day (bpd) in the year to March 31, ship-tracking data from industry sources showed.
The share of that provided by members of the Organization of the Petroleum Exporting Countries (OPEC) – mainly from the Middle East and Africa – was 71.6% in 2021/22, compared with 71.9% in 2020/21, the data showed.
OPEC oil accounted for about 88% of India’s crude imports in 2007/08.
“OPEC is increasing its production almost every month by about 250,000 bpd, and India is a nearby market for that. At the same time Indian refiners raised crude processing to meet rising fuel demand,” said Refinitiv analyst Ehsan Ul Haq.
In the next few months OPEC’s share of India’s overall imports could decline because refiners in Asia’s third-largest economy are buying cheaper Russian oil that has been shunned by some western countries and companies after Russia’s invasion of Ukraine.
Russian oil continued to account for less than 1% of India’s crude imports in 2021/22.
A rally in global oil prices from November pushed Indian refiners to take “full volumes or perhaps more than committed volumes” in their annual contracts with Middle East producers, said Haq.
Indian refiners’ intake of medium to heavy grades of oil, mainly from the Middle East, rose as the easing of the country’s COVID-19 lockdown boosted domestic fuel demand.
“Margins for diesel have been dazzling and heavy grades from the Middle East are diesel-rich,” said Haq.
India’s fuel demand in the past financial year rose by 4.3% for the biggest increase in four years.
The share of Middle East oil in India’s imports improved to 64% in 2021/22, up from 62% the previous year, while that of Latin America and Africa declined.