- Thursday, April 25, 2024
By: Shubham Ghosh
INDIA has significantly reduced its oil import from the Middle East as part of a strategy to diversify crude resources. According to reports, the world’s third-biggest oil producer saw the share of the Middle Eastern crude in its imports plummeting to a 25-month low in May, tanker data provided by trade sources revealed. This happened after refiners looked for alternatives in response to the Indian government’s call to diversify supplies.
The share of the Middle East went down to less than 53 per cent, the lowest since April 2019 and down from 67.9 per cent in April this year, the data showed. The lower purchases of oil from the Middle East pushed the Opec’s (Organization of the Petroleum Exporting Countries) share of India’s oil imports to a record low.
While imports from Saudi Arabia, India’s second-largest supplier after Iraq, dropped by about a quarter from a year ago, those from the United Arab Emirates, which dropped to No.7 from No.3 in April, went down by 39 per cent, according to the data. India’s refiners increased imports from countries in Latin America, the United States and the Mediterranean to replace Middle East as a major oil supplier.
“Indian refiners bought higher volumes of gasoline-rich US oil in March, expecting a recovery in local gasoline demand to continue in the months ahead,” Ehsan Ul Haq, lead analyst for oil research and forecasts at Refinitiv, was quoted as saying by the Khaleej Times.
India looked to diversify after Opec overlooked its plea
Analysts pointed out that India had asked its refiners to diversify crude sources after the Opec and its allies overlooked New Delhi’s plea to ease supply restrictions. India imported about 4.2 million barrels of oil per day in May, which is just below the figures in April but more than 31 per cent higher than the figures registered a year earlier, according to the data.
“We have asked companies to aggressively look for diversification. We cannot be held hostage to the arbitrary decision of Middle East producers. When they wanted to stabilize the market we stood by them,” a source in the Indian government had said in March.
While Iraq remains India’s No.1 oil supplier, countries like the US and Canada have first emerged as its major oil suppliers.
