According to commodities at Sea, S&P global market intelligence, India’s seaborne crude oil imports surpassed 4.8 million barrels per day (b/d) in April, the highest on record, with higher Mideast and Russian volumes displacing cargoes from further afield, such as the U.S., Canada and West Africa.
Yen Ling Song, associate director at S&P Global Market Intelligence said,”A rebound in domestic demand as well as stronger oil product exports likely spurred India’s crude import volumes.”
Iraq remained the top supplier to India, with flows stable at a combined 1.2 million b/d. Strong Middle East arrivals offset volumes from West Africa and the US.
A strong Brent-Dubai exchange-of-futures-for-swaps (EFS) at the start of the year due to surging Brent prompted Indian refiners to turn more towards Dubai-pegged crudes from the Middle East. The share of crudes from the region increased to a record 73% in April, up from 69% in March and 67% in February.
“Refiners have been highly attracted to discounts for Russian-origin cargoes and India has been a major alternative destination for Urals crude that would typically have been sold to refiners in Europe,” said Yen Ling Song, adding that conversely, stronger demand from European end-users for other Atlantic Basin crudes—to replace Russian cargoes—pushed up these procurement costs, and India has instead turned more to the Middle East in the last month.
As of May 9, almost 10 million barrels of crude loading from Russia—including 970,000 barrels of Kazakhstan’s CPC Blend—have discharged in India this month. Another 16 vessels with 13 million barrels are currently indicating India as their destination and are expected to arrive within the next four weeks. This includes one cargo each of CPC Blend and Siberian Light and the rest comprising Urals.