India’s new bonhomie with the US is evident even in the oil purchases of late. As crude oil imports from Russia exhibit signs of stagnation, India has gradually increased its shipments of the critical commodity from the US, which is clawing back its lost share.
According to energy intelligence firm Vortexa, India’s crude oil imports from Russia fell 8 per cent m-o-m to 1.798 million barrels per day (mb/d) in June, from a record 1.96 mb/d in May, reportedly due to voluntary production cuts by the world’s second largest crude oil producer.
On the other hand, Vortexa’s data also show that imports from the US have been inching up consistently since March this year. In January 2023, India imported 406,000 barrels per day (bpd) from the US, which nosedived to 244,000 bpd a month later, and then fell steeply to 100,000 bpd in March.
However, in April, India’s imports from the US appreciated to 119,000 bpd and then to 138,000 bpd a month later. The shipments then grew a healthy 62 per cent to hit 224,000 bpd in June.
According to OPEC’s monthly oil market report, total India’s crude imports has slipped from the highs seen in February to an average of 4.8 mb/d in April. This represents a m-o-m decline of 55,000 bpd, or about 1 per cent. On a y-o-y basis, crude inflows fell 0.4 mb/d, or around 8 per cent.
As per the Petroleum Planning and Analysis Cell (PPAC), India’s cumulative crude oil imports during April and May stood at almost 40 million tonnes (mt), of which 6.9 per cent was from North America. Before the Russia-Ukraine conflict began in February 2022, North America’s share was around 14 per cent. India began importing crude oil from the US in the second half of 2017.
As per Commerce Ministry data, India imported $4.9 billion worth of crude oil from the US in FY20, making it India’s fourth top supplier. In FY21 and FY22 as well, the US was the fourth top crude oil supplier with cargoes worth $5.40 billion and $11.32 billion, respectively. It took the fifth spot in FY23 with crude exports of $10.18 billion.
S&P Global Commodity Insights, in a January 2023 report, said the US’ share in India’s crude oil basket rose from 5-6 per cent in April 2022 to around 10 per cent in November 2022. Similarly, a joint study by KPMG India and American Chamber of Commerce (Amcham) India said triggered by the Organization of the Petroleum Exporting Countries’ (OPEC)+ announcement on cutting crude oil output, India is looking to diversify its crude sources and is majorly focusing on limiting its reliance on Middle Eastern crude.
This state of affairs has largely benefited the import of crude from the US which, of late, has witnessed an uptick, the study, released in May 2023, added.