India’s crude oil imports from Iraq rose to the highest levels in more than a year at over 1 million barrels per day (mb/d) in November 2023 propelled by high prices of Saudi Arabia’s Arab Light grade and softening prices of Basrah, the flagship Iraqi grade.

Data from the energy intelligence firm Vortexa show that crude oil imports from Iraq rose 32 per cent m-o-m and 24 per cent y-o-y in November.

On the other hand, imports from Saudi Arabia fell 28 per cent m-o-m to 667,000 barrels per day (b/d) last month. Out-bound shipments from the Arab country to the world’s third largest crude oil consumer were almost flat in November 2023 on an annual basis.

Trade sources said Indian refiners lapped up the Iraqi grade in higher numbers as prices of Arab Light in November rose to the highest level so far in the current calendar year, while that of Basrah, a similar grade, fell to its lowest in last month, since August 2023.

Saudi Arabia raised the price of Arab light — a medium sour grade — in November, the fifth consecutive month of uptick in prices. The official selling price (OSP) was raised by $4 per barrel against the Oman/Dubai average, which is the highest so far in the current calendar year. December prices have been kept unchanged from November.

Data from Iraq’s State Oil Marketing Organisation (SOMO) shows that Basrah prices in November 2023 averaged at $82.82 per barrel on a provisional basis compared to $87.58 in October, $91.35 a barrel in September and $84.79 in August.

Russian imports

India’s crude oil imports from Russia were marginally lower at around 1.49 mb/d in November compared to 1.55 mb/d in October 2023, as per Vortexa. Cargoes of the flagship Ural grade were also lower at 1.23 mb/d in November compared to 1.4 mb/d a month before.

Trade sources said there is some hardening in freight prices which may be reflecting in lower volumes, but added that the relationship is too beneficial for both countries to ignore. “It’s a mutually beneficial relationship. Both will work out solutions if freight rates rise due to the US investigation on shadow fleets,” said one of the traders.

The arrangement is still attractive as discounts are in the range of $5 per barrel. Middle eastern grades become more economically viable if Russian discounts slip below $4 a barrel, said a senior official with an oil marketing company (OMC).

“Higher freight costs for shipping Russian crude will have to be compensated with lower FOB export prices in order for Russian crude to remain competitive relative to other Middle Eastern rival grades. Our data shows that India’s imports of Russian crude have remained robust in the past months, and it is reasonable to expect that Russia will have to keep its crude prices attractive going forward given the limited alternative markets that it has,” Vortexa’s Head of APAC Analysis, Serena Huang told businessline.

Overall, India’s crude oil imports fell marginally to 4.51 mb/d last month from 4.56 mb/d in October 2023.

The import by private refiners such as Reliance Industries and Nayara Energy was almost flat on a monthly basis at 600,000 b/d, while those by public sector refiners like Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation fell by 6 per cent m-o-m to 888,000 b/d in November.