West Asian crude suppliers are making a comeback in the Indian oil market, staving off Russia’s attempts to entrench itself on the strength of large discounts and going to the extent of offering rates lower than even the discounted Russian supplies.

Iraq, India’s biggest crude oil supplier, maintained its lead over in August, supplying 12-20 per cent more to India in the first 30 days of the month, according to two leading data intelligence agencies that estimate crude oil shipments by tracking tanker movements.

supplied around 895,000 barrels a day (b/d) of crude to India as of August 30, compared to Russia’s 748,000 b/d, and Saudi Arabia’s 768,000 b/d, according to Paris-based Kpler. That compares with Iraqi shipments of 965,000 b/d in July, Russia’s 868,000 b/d, and Saudi Arabia’s 811,000 b/d.

London-based data analytics provider Vortexa pegs Indian imports of Iraqi crude in August at 860,000 b/d, which is 90,000 b/d higher than Russia’s 770,000 b/d. Saudi Arabia shipped 820,000 b/d in August. Vortexa includes Urals, ESPO and other Russian grades in its numbers. That compares to Iraqi supplies of 1.02 million b/d in July followed by Russian and Saudi shipments of 860,000 b/d each.

and Saudi Arabia want to protect their turf. offered barrels at a discounted price, and that may have led to Indian refiners shying away from Russian barrels,” said Rohit Rathod, a senior analyst with Vortexa.

India needed less crude in August because of shutdowns at major refineries reducing the need for spot Russian shipments, industry officials said. “It is a reflection of generally lower crude demand from India that flows are dropping for all three,’’ said Matt Smith, an analyst at Kpler.

Iraq undercut in June by supplying a range of crudes that on an average cost $9 a barrel less than Russian oil, according to Indian customs data.

Indian customs data tends to differ with information provided by foreign data agencies because the customs calculates volumes every month based on delivered cargoes.

“Russian crude oil prices have increased on the back of robust demand, and it is discounted less,’’ said Tilak Doshi, an industry expert with more than 30 years of experience in oil and gas, including senior positions in Saudi Aramco and KAPSARC. Russian crude is being redirected to the East as western sanctions are progressively imposed, with the European Union planning new sanctions from December to prohibit Russian crude imports, he added.

Though Iraq has resorted to discounts and offered a wider spectrum of crudes to Indian refiners to retain its dominance in India’s oil market, Saudi Arabia has been more conservative, industry officials said.

Iraq has succeeded in increasing the availability of Basrah Medium, a viable substitute for Urals, and Basrah Heavy, relatively cheaper than Basrah Light, that are suited to India’s upgraded plants, keeping overall costs lower, an official with a state refiner said.

Russia’s medium sour Urals, similar to some West Asia grades such as Arab medium, is also suited to refiners when available at a discount, but availability of the grade was an issue in the past as Europe and China consumed most of the Russian oil.

India typically buys most of its crude via term contracts from West Asian suppliers led by Iraq and Saudi Arabia, and spot Russian crude, consisting of Urals and ESPO Blends, have largely displaced the grades from the United States, United Arab Emirates, Mexico and west Africa.

Iraq boosted its share in June to 26 per cent of the total Indian crude imports, from 24 per cent in May, after its cost of supply averaged $93 a barrel compared to $102 a barrel for Russian crude and $116 a barrel for the Indian crude basket, a domestic index that tracks key crudes sourced by India. Iraq supplied 1.39 million barrels a day in June, 26 per cent higher from May, and compared to 986,000 barrels a day of Russian supplies in June.

The share of Russian exports in India’s overall crude purchases more than doubled to 18 per cent in June from 8 per cent in April. In volume terms, this translated to nearly one million barrels a day of Russian oil in June. Before the war broke out in Ukraine in February, Russian supplies were less than 1 per cent of India’s total imports, averaging around 40,000 barrels a day in January-February.

Source link

By fintax360

We Fintax360 team simplify finances and taxes for millions of Indian businesses and people. We educate them about finances, taxes and improve their relationship with money.

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: