{"id":11501,"date":"2024-08-04T03:54:38","date_gmt":"2024-08-04T03:54:38","guid":{"rendered":"https:\/\/roydadnaft.ir\/English\/?p=11501"},"modified":"2024-08-04T03:54:38","modified_gmt":"2024-08-04T03:54:38","slug":"russia-continues-to-dominate-indias-oil-imports-in-july-saudi-arabia-recovers-from-june-lows","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/11501\/","title":{"rendered":"Russia continues to dominate India\u2019s oil imports in July, Saudi Arabia recovers from June lows"},"content":{"rendered":"

RoydadNaft – <\/a><\/span>\u00a0Indian refiners imported a total of 2.08 million barrels per day (bpd) of Russian crude oil in July, the highest since June of last year.<\/p>\n

India\u2019s Russian oil imports stayed robust in July, registering a slight month-over-month growth to the highest level in over a year powered by strong flows of Moscow\u2019s key crude grade Urals and an uptick in import of ESPO crude, as per oil tanker tracking data and industry experts.<\/p>\n

INDIA\u2019S TOP 5 SOURCE MARKETS FOR CRUDE OIL IN JULY<\/span><\/b><\/p>\n

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India\u2019s Russian oil imports in July were around a per cent higher sequentially, and accounted for as much as 43 per cent of India\u2019s total oil imports of 4.82 million bpd. Russia\u2019s share was almost as much as the cumulative market share of the next four large suppliers\u2014Iraq, Saudi Arabia, the United Arab Emirates (UAE), and the United States (US). July was the seventh straight month of sequential growth in India\u2019s Russian oil imports.<\/p>\n

Additional availability of Russian crude for export markets due to Ukrainian drone strikes on Russian refinery infrastructure and sizable price differential vis-\u00e0-vis competing Middle Eastern crude grades led to higher flows of Russian oil to India in recent months. The rise in India\u2019s import of discounted Russian oil over the past few months has hit flows from Saudi Arabia the most.<\/p>\n

In June, import volumes from Riyadh had fallen to the lowest monthly level in over a decade. July saw some recovery from those lows, with flows from the West Asian supplier touching a four-month high. Oil imports from Saudi Arabia\u2014India\u2019s third-biggest source market for crude\u2014in July were at 0.66 million bpd, up from June\u2019s 0.42 million bpd, but still considerably lower than last year\u2019s average of 0.72 million bpd. Saudi Arabian oil accounted for 13.7 per cent of India\u2019s oil imports in July.<\/p>\n

\u201cJune saw the highest Saudi formula prices (official selling price, or OSP) this year, so buyers drastically cut their nominations for June-loading cargoes. But considering July OSPs were already 40-50 cents per barrel lower, some recovery of Indian demand has happened. Even though one could argue Saudi crude is the most expensive option out there for a medium-sour grade, the availability thereof creates a safety net for Indian refiners that can get guaranteed volumes from Saudi Arabia,\u201d said Viktor Katona, head of crude analysis at Kpler. According to industry watchers, Urals has a price advantage of over $5 per barrel over Saudi Arabian medium-sour grades.<\/p>\n

Urals, a medium-sour crude, is the mainstay of India\u2019s Russian oil imports. In July, Indian refiners cumulatively bought 1.42 million bpd of Urals crude. India\u2019s Urals import volumes for the months accounted for over 68 per cent of New Delhi\u2019s total oil imports from Moscow. Evidently, the price differential between Urals and competing crude grades from India\u2019s traditional West Asian suppliers was significant enough for Indian refiners to prefer the Russian grade.<\/p>\n

July also marked the highest-ever import volume of Russia\u2019s ESPO crude at 0.16 million bpd. Purchases of this light and sweet crude, which has low sulphur content and is considered a superior-quality grade than Urals, have been dominated by Chinese refiners.<\/p>\n

\u201cOne could say that Indian refiners had the opportunity to buy this (ESPO crude) even earlier, but back then the Chinese demand dominated the ESPO loading schedule. Chinese crude imports are set to come in at the lowest monthly average since August 2022, so even though India is headed into its own refinery maintenance season, there was more space for Indian refiners (for ESPO purchases),\u201d said Katona.<\/p>\n

Oil import volumes from Iraq\u2014India\u2019s second-largest source of crude oil\u2014in July were flat sequentially at 0.80 million bpd, accounting for 16.5 per cent of India\u2019s total oil imports for the month. Prior to the war in Ukraine, Iraq and Saudi Arabia were the top two suppliers of crude oil to India. But as the West started weaning itself off Russian energy supplies following Moscow\u2019s February 2022 invasion of Ukraine, Russia started offering discounts on its crude and Indian refiners started snapping up the discounted barrels.<\/p>\n

As the world\u2019s third-largest consumer of crude oil with a high import dependency level of over 85 per cent, India is extremely sensitive to oil prices. Although trade sources have indicated that discounts on Russian crude have shrunk over time, Indian refiners have evidently remained keen on buying Russian oil as given the high import volumes, even lower discount levels lead to significant savings.<\/p>\n

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