Oil producers cartel OPEC’s share in India’s oil imports fell to an all-time low of 46% in April as purchases of cheaper Russian oil peaked, industry data showed.
Organisation of the Petroleum Exporting Countries nations, mainly in the Middle East and Africa, had a 72% share of all crude oil India imported in April 2022.
This share slid to 46% in April 2023, according to energy cargo tracker Vortexa.
OPEC made up for as much as 90% 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.
From a market share of less than 1% 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% 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% share, according to Vortexa.
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 of oil bought from Iraq, which had been India’s top oil supplier since 2017-18. Saudi Arabia has been pushed down to the third spot with 0.67 million bpd supplies.
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.
“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.
“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.
Russia is selling record amounts of crude oil to India to plug the gap in its energy exports after the European Union banned imports in December.
In December, the EU banned Russian seaborne oil and imposed a $60-per-barrel price cap, which prevents other countries from using EU shipping and insurance services, unless oil is sold below the cap. Industry officials said Indian refiners are using the UAE’s dirham to pay for oil that is imported at a price lower than $60.
India imported just 68,600 bpd of oil from Russia in March 2022 and this year the purchases have jumped to 1,678,000 bpd, according to Vortexa.