India is increasing its imports of Middle Eastern oil, the highest rate in two years

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Economy

Al Ain News Agencies
Data from commercial sources showed Friday that Middle Eastern oil accounted for 71.5% of India’s imports, the world’s third largest oil consumer, in July.

This share is the highest for the Middle East in 26 months, while imports from Africa fell to 5%, the lowest level in at least 14 years.

During the month, Iraq maintained its position as the largest supplier of oil to India, followed by Saudi Arabia and the UAE, and the United States ranked fourth in the list of largest suppliers, followed by Kuwait, Colombia, and Qatar.

And Nigeria, which was India’s fifth largest supplier in June, fell to eighth.

Analysts said that reduced fuel demand and dwindling profits in the refining activity boosted the appetite for high-sulfur Middle Eastern grades at the expense of low-sulfur African oil.

India imports more than 80% of its oil needs.

“Indian refiners have been trying since April to conserve all possible costs of purchasing crude at a time when refining profits are dwindling and demand for fuel collapses. They have been forced to reduce operating rates of refineries,” said Ihsan ul-Haq, an analyst at Refinitiv.

Indian refiners often turn to the spot market to obtain low-sulfur grades and buy high-sulfur grades in fixed-term deals with Middle Eastern producers.

“Imports from the Middle East help save shipping costs. Refiners have preferred to increase the quantities allocated under contracts with producers in the Middle East to African oil linked to Brent, which takes more than 20 days to reach India,” he added.

India’s oil imports plunged to their lowest levels in more than 9 years in July, dropping to about 3 million barrels per day, while lower fuel demand encouraged refiners to close maintenance units.

Data showed that imports from OPEC countries fell to their lowest levels in at least 14 years, reaching 67.15% in July.

Africa’s share of Indian imports was also affected by the increase in imports from the United States.

The sources refused to reveal her identities because she is not authorized to speak to the media.

The data showed that India did not import any oil from Venezuela in July for the second month in a row.





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