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India’s oil imports from Africa jumped to their highest in 10 months in August as refiners switched out more expensive crude from the Middle East, shipping data provided by trade sources showed.
The world’s third-biggest oil importer shipped in about 3.95 million barrels per day (bpd) of oil in August, the highest volume since April, with African nations accounting for about 17.5 per cent, the data showed.
“Spot prices of west African oil versus Brent were down in the most part of July compared with June. That, along with lower freight, offered an opportunity to buy Nigerian oil,” said Ehsan Ul Haq, analyst with Refinitiv.
He said in order to raise revenue, Nigeria was supplying more oil in July than it pledged under a production cut agreement between OPEC and its allies, while Angola was scouting for a new market after the Chinese cut purchases.
“And the new home was India.”
An internal OPEC report showed Iraq and Nigeria were the least compliant over the May-July period.
Also read: Crude oil slips on unsteady demand, weak dollar
Strengthening diesel cracks also prompted Indian refiners to buy African grades, while an increase in official selling prices by key Gulf producers, including Saudi Arabia, deterred them, Haq said.
India also shipped in Venezuelan oil in August after a gap of two months as Reliance Industries obtained permission from the US to swap diesel for oil.
Higher intake of Nigerian and Venezuelan oil lifted the share of OPEC’s oil in India’s overall August imports to 77.6 per cent, the highest since January, from 67.2 per cent last month, the data showed.
OPEC’s share was, however, at a record low over the April-August period, the first five months of the fiscal year.
Also read: Is OPEC’s power over the oil market broken?
The share of Middle Eastern oil shrank to 62.4 per cent, the lowest in three months, from 71.3 per cent last month, while that of Latin America rose to 9.7 per cent from 6.3 per cent.
During the month, Iraq remained the top oil supplier to India followed by Saudi Arabia and United Arab Emirates. Nigeria, which was the eighth-largest supplier to India in July, rose to No.4, pushing the US to fifth position.
Kuwait stayed at No. 6 while Venezuela replaced Colombia as the seventh top supplier.
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