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Saudi Arabia overtakes Russia to become India’s No. 2 oil supplier

20220925 164511
20220925 164511

Saudi Arabia overtakes Russia to become India's No. 2 oil supplier

India shipped 863,950 barrels per day (bpd) of crude from Saudi Arabia.

Saudi Arabia emerged as India’s second-biggest oil supplier after a three-month gap, beating Russia by a narrow margin, while Iraq retained the top spot in August, data from industry and trade sources showed.

India, the world’s third largest oil importer and consumer, shipped 863,950 barrels per day (bpd) of crude from Saudi Arabia, up 4.8% from the previous month, while purchases from Russia fell 2.4% at 855,950 bpd, the data showed.

Despite Saudi Arabia’s gain, India’s Organization of Petroleum Exporting Countries oil share fell to 59.8%, the lowest level in at least 16 years, as India cut African imports.

India has become Russia’s second-largest buyer of oil after China, as others have cut their purchases following Moscow’s invasion of Ukraine in late February.

The two countries, eager to obtain raw materials at discounts compared to supplies from other countries, are seen as cushioning the impact of Western sanctions on Moscow.

New Delhi has not publicly condemned Moscow for its ‘special military action’ in Ukraine. Prime Minister Narendra Modi will meet President Putin on Friday on the sidelines of a summit of the Shanghai Cooperation Organization, a regional security bloc.

India’s monthly oil imports from Russia have fallen after hitting a record high in June as Moscow cut discounts offered for its oil while refiners increased forward supplies.

“In the end, Saudi supplies cannot be cut due to forward contract clauses and Russia was able to reduce its discounts due to high demand, especially in Asia,” said Ehsan Ul Haq, an analyst at Refinitiv.

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India’s total crude oil imports in August fell to a five-month low of 4.45 million bpd, down 4.1% from July, due to maintenance at some refineries, the data showed.

The increased intake of oil from the Caspian Sea, mainly from Kazakhstan, Russia and Azerbaijan, has affected India’s purchases from Africa and other countries.

African oil’s share in August halved to 4.2%, while Latin America’s share fell to 5.3% from around 7.7%, the data showed.

“India’s diesel demand is lower during the monsoon season, which means low oil import from West Africa,” Haq said.

In August, the United Arab Emirates remained in fourth place, while Kazakhstan replaced Kuwait to become India’s fifth largest oil supplier, followed by the United States.

Rising Saudi and Emirati oil purchases lifted the Middle East’s share of India to 59% in August from 54% in July, while that of the CIS nations rose to about a quarter from 23%, data showed.

Russian oil accounted for about 16% of India’s total imports in April-August, the first five months of this fiscal year, at 757,000 bpd compared with 20,000 bpd a year earlier, or a 0.5% share, as the data showed.

That lifted the CIS countries’ share of India’s April-August oil imports to about 20% from 2.9%, the data showed.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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