The Middle East loses 1.21 million barrels of oil exports to India in FY23

India’s traditional crude oil supplier, the Middle East, lost nearly 1.21 million barrels a day of exports in FY23.

According to energy news outlet Vortexa, the Middle East accounted for 69 percent of India’s total crude oil imports in April 2022, down from 44 percent in April 2023, down a sharp 25 percent drop.

The sharp drop in the share of Middle Eastern countries – Iraq, Saudi Arabia, Kuwait, UAE, Oman – comes as Indian refiners turn to Russia for discounted supplies.

Analysts say Russia is giving India’s traditional suppliers stiff competition to become the biggest contributor to the world’s third-largest crude oil consumer and fourth-largest refiner.

Asked whether Russia has surpassed the Middle East bloc as India’s top supplier, said Serena Huang, head of APAC analysis at Vortexa. “As of April 2023, India’s crude oil imports from the Middle East are still higher than Russia’s, but the gap has narrowed since last April.”

She pointed out that the Middle East’s share of India’s cumulative crude oil imports was 67 percent in March 2022, down from 44 percent last month.

market share

On competition from the Middle East to reclaim their share, Huang explained, “Saudi Arabia and Iraq have temporary contracts with Indian refiners that help them secure their market share. Our preliminary data suggests that Saudi Arabian and Iraqi crude oil shipments to India rose by over 450,000 b/d month-on-month in April, which should see a rebound in their market share over the next month.”

She added that both countries could turn to other Asian countries or Europe should their volumes shift from India.

The Middle East accounted for 58.16 percent of India’s total crude oil import bill of $158.3 billion by value in FY23, according to the Department of Commerce. India paid 92.07 billion dollars for the raw material to the Arab countries in the last fiscal year. Its share in FY22 and FY21 was 64.7 percent and 58.25 percent, respectively.

In contrast, Russia, which accounted for just a 1.5 percent share, or less than $1 billion, in FY21, has grown in influence over the next two fiscal years. During FY22, the former Soviet Union’s share rose to 2 percent, with income of $2.47 billion out of total crude oil import payments of $120.7 billion.

In FY23, Indian refiners paid Russian oil companies a whopping $31.02 billion, with the country accounting for 19.6 percent of the total crude oil import bill.

According to Vortexa, in April 2023 India remained the largest buyer of Russian offshore crude oil for the fifth straight month, with inbound shipments rising a little over 1 percent MoM to 1.63 mb/d.

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