After a four-month decline, India’s crude oil imports surged in October, rising by 5.9% month-on-month to reach 18.53 million metric tons. This rebound follows a one-year low in September, signaling a shift in the country’s energy consumption trends.
Seasonal Demand and Economic Growth Drive Increased Imports
- The increase in crude oil imports can be attributed to the rising demand for fuel during the winter season.
- As the festive season unfolded, and with heightened industrial activity, India’s fuel consumption reached a four-month high in October.
- The surge in demand for refined products necessitated a higher volume of crude oil imports.
- According to Giovanni Staunovo, a UBS analyst, the seasonal uptick in demand towards the year-end played a crucial role in driving the need for increased crude oil imports.
- Additionally, the year-on-year rise in imports is indicative of robust domestic demand, supported by solid economic growth.
Product Imports and Exports Reflect Market Dynamics
- Data from the Petroleum Planning and Analysis Cell (PPAC) website reveals a notable increase in product imports, rising by 13.4% to 4.41 million tons compared to October last year.
- Simultaneously, product exports saw a 12.6% uptick over the same period, reaching 4.47 million tons.
- On a monthly basis, product imports experienced a 7.6% rise in October, while exports declined by 7%.
- These dynamics in product trade highlight the intricate balance between domestic demand and international market trends.
OPEC’s Influence on India’s Oil Imports
- In October, OPEC’s share in India’s oil imports reached a 10-month high. This increase was driven by Indian refiners purchasing more crude from Saudi Arabia and the United Arab Emirates.
- Notably, the narrowing discounts for Russian oil during that month led to a shift in preference towards OPEC suppliers.
- In recent months, Indian refiners have adjusted their import patterns for Russian oil, reducing the intake from the peak of nearly 2 million barrels per day earlier this year.
- This shift is attributed to the diminishing discounts on Russian oil.