Oil investors globally have been worried about the potential impact of the sweeping Corona wave in India on demand, but it was not that serious, at least for Saudi Arabia.
India has returned to request its usual supplies of Saudi oil, after reducing it this month, as a result of the outbreak of the third wave of the Corona virus.
The positive results of the demand for Saudi oil came, thanks to the smart pricing policy adopted by the oil giant Aramco.
Four sources told Reuters, on Thursday, that the Indian government’s refiners have requested the usual supplies of oil from Saudi Aramco for next June.
Reasonable price keeps demand
The sources added that one of the reasons for this usual demand is to take advantage of the lower prices offered by the world’s largest oil exporter.
She explained that this usual request during the next month, was made after the refining companies of the Indian government reduced purchases this month.
According to Reuters, the purchases of Indian state refiners, which include the Indian Oil Corporation, Bharat Petroleum, Engineering Petroleum, and Mangalore Refining and Petrochemicals, usually amount to between 14.8 and 15 million barrels of Saudi oil per month.
“This time, there is no directive from the Oil Ministry to reduce imports next June, and unlike last time, Saudi Aramco reduced prices,” one of the sources said.
Saudi Arabia has lowered the official selling price for next June shipments of all its materials sold to Asia.
Saudi Arabia set the price next June for its main Arab Light crude at $ 1.7 a barrel above the Oman / Dubai average in shipments heading to Asia, down 10 cents from this May, which is the first cut since December of last year, according to Sources told Reuters.
India is the third largest importer of oil in the world, and imports meet more than 80% of its oil needs, with heavy reliance on the Middle East.
India is the third largest importer of crude oil in the world, with a daily average of between 4.6 – 4.9 million barrels per day, and it is also the third largest consumer of crude oil in the world.
India underwent a strict national lockdown last year to contain the outbreak of the Coronavirus, which led to a significant decline in foreign trade volumes.
The second largest economy in the Asia-Pacific region was shaken by the fierce attack of the Corona virus, which ignited India’s trade deficit.
And preliminary government data showed, last Sunday, that India’s trade deficit reached 15.24 billion dollars in April.
According to the figures, merchandise exports rose to $ 30.21 billion that month from $ 10.17 billion a year ago, while imports rose to $ 45.45 billion from $ 17.09 billion.
On Thursday, according to Agence France-Presse, New Delhi announced nearly 4,000 deaths from the virus and more than 412,000 infections, both of which were new records that undermined hopes that the catastrophic boom would diminish after days that witnessed a decline in the number of infections.
The epidemic has killed more than 3.2 million people worldwide since it first appeared in late 2019, according to official data compiled by Agence France-Presse.
The United States is the country most affected by about 580,000 deaths, followed by Brazil with more than 414,000, and India with more than 230,000.
The outbreak of the virus in both India and Japan threatens to increase the supply of oil by an average of 3.5 million barrels of oil per day, to record the global supply of nearly 6 million barrels per day, higher than the surplus recorded in the past few years.
At the beginning of last April, the alliance, which includes members of the “OPEC” organization as well as independent producers led by Russia, agreed to ease production restrictions by 350 thousand barrels per day in May, so that the production cut would stabilize at about 6.65 million barrels per day, out of about 7 million barrels since the beginning of 2021.
The coalition will implement another easing to reduce production in June, by another 350 thousand barrels per day, to 6.3 million barrels.
This is followed by another easing of nearly 400,000 barrels per day, to 5.85 million barrels in July.
Before the outbreak of the new wave of the Corona virus in India and Japan, the global surplus supply of crude oil was approaching 2.5 million barrels per day, down from an average of 5 million barrels per day in the crisis of falling oil prices from 2015 to 2018.