India’s Oil Imports from Middle East Jump 20% to 5.33 Million Barrels a Day
Key Facts
India’s crude oil imports from the Middle East rose to about 2.8 million barrels a day in September, their highest level since February, according to data cited by Reuters. The increase came as the country’s total oil imports climbed 20% month on month to about 5.33 million barrels a day. Gulf oil accounted for about 54% of those imports during the month. By contrast, purchases of Russian oil declined, but Russia remained India’s largest single supplier. The figures reflect a larger share for Middle Eastern crude in India’s supply mix, without any individual Gulf country overtaking Russia.
India’s imports of Russian oil fell about 14% month on month to about 1.8 million barrels a day in September, Reuters reported. Even so, Russia remained the largest supplier by country, a distinction between total Gulf supplies and an individual source. Partial data through September 27 showed Russian supplies at nearly 1.742 million barrels a day, according to Business Standard. That puts the increase in Middle Eastern imports in the context of competition among supply regions, not a shift demonstrating that a Gulf country had overtaken Russia. The Indian Express, citing Kpler data, reported a different estimate for Russian imports in September, at 1.9 million barrels a day, down from 2.1 million in August, reflecting differences among sources’ estimates.
Iraqi oil was among the main contributors to the increase in Gulf supplies, with India’s imports rising to about 830,000 barrels a day in September, compared with about 171,000 in August, according to Reuters. Indian shipments from Iraq, Saudi Arabia, Kuwait and Qatar also increased during the month, The Indian Express reported. The newspaper said Gulf suppliers used ship-to-ship transfers to move crude through the waters of the Strait of Hormuz. These operations support the continued flow of shipments through the passage despite the risks around it. The expansion of Middle Eastern supplies coincided with an increase in total imports, allowing Indian refiners to boost purchases from the region.
A source in the refining sector said, according to Reuters, that refiners prefer to maximize purchases of discounted Middle Eastern crude because the voyage is shorter. Some producers cut their selling prices to offset higher shipping costs, making those shipments more attractive to buyers. India’s oil minister, Hardeep Singh Puri, said Middle Eastern supplies were rising as the region was able to ship more cargoes. Puri linked the decline in Russian purchases to a comparison of discounts and prices, indicating that buying decisions are affected by the cost of crude upon arrival. Together, these factors—cargo availability, shorter voyages and competitive prices—explain the return to Middle Eastern crude by refiners.
The changing weight of Russian oil in the Indian market reflects shifts following the war in Ukraine: Puri said Russia accounted for 0.2% of India’s oil imports before the war, after which Russian purchases increased because of discounts. The shift highlights how India’s supply mix changed as prices and available discounts changed. In September, Reuters data showed crude from the Middle East rising to its highest level since February, while Russian imports declined month on month. But Russia’s continued position as the largest single supplier indicates that increased Gulf shipments do not mean Russia’s role in India’s market has disappeared. Comparisons between regions and suppliers remain tied to the period and the entity compiling the import data.
A source in India’s refining sector said refinery purchases of Russian oil are likely to remain low in the coming months because its cost upon arrival has become comparable to that of some Middle Eastern grades, particularly Iraqi crude. A Kpler analyst also said improved availability of Middle Eastern crude could prompt Indian refiners to rely on it more as geopolitical uncertainty continues. This assessment reinforces the importance of cargo availability and transport costs in future sourcing decisions. The increase in Iraqi crude in September illustrates how flows from one Gulf supplier changed during the month. Russia nevertheless remained the largest single supplier in the month’s data, while the Gulf’s share rose as a group of suppliers.