OPEC’S share of India’s oil imports fell to 73 per cent in October, its lowest monthly share since at least 2011, tanker data from sources showed, as refiners shipped in fuel from the United States and other suppliers. India, which usually imports about 80 per cent of its needs from members of the Organisation of the Petroleum Exporting Countries, has been diversifying its sources of oil as local refiners have upgraded plants to process cheaper crude grades. India, the world’s third biggest oil importer, shipped in 4.56 million barrels per day (bpd) of oil in October, about 3.3 per cent less compared with a year ago, data showed. Of that, it bought 3.43 million bpd oil from OPEC.
OPEC’s share of India’s imports in September was about 81% although total volumes were lower, as the South Asian nation cut imports to a three-year low due to maintenance at some refineries.
OPEC oil output dipped to an eight-year low in September after attacks on Saudi oil plants led to production cuts, a Reuters survey showed. The kingdom’s output has since recovered. In October, Iraq replaced Saudi Arabia as India’s top oil supplier, tanker arrival data showed, with refiners cutting purchases of the more expensive Saudi oil. Sources who supplied the data asked not to be named. “Saudi had raised its official selling price (OSP) that led to some buyers migrating to Iraqi and other producers,” said Ehsan Ul Haq, an analyst with Refinitiv.
Saudi Arabia raised its October OSP for its Arab Light grade for Asia by $0.60/barrel compared to a $0.35/barrel increase in Iraq’s Basra Light. To make up for lower Saudi purchases, India also boosted purchases from Nigeria, the third biggest supplier in October, as well as from Kuwait and Mexico. India shipped in a record 336,000 bpd U.S. oil in October, about 7.5% total imports, as private refiner Reliance Industries bought three tanker cargoes, data showed. The United States was Indian’s fourth biggest supplier in October.
“Indian demand for gasoil has been falling but overall Asian demand has been relatively strong because of new marine fuel rules from January. And good diesel cracks is prompting refiners to buy distillate rich crudes like that of Nigeria,” Haq said. Refining margins or cracks for 10 ppm gasoil traded at $15.46 per barrel over Dubai crude during Asian trade on Monday and cash premiums for the fuel GO10-SIN-DIF climbed to 34 cents per barrel to Singapore quotes, compared with 31 cents per barrel on Friday. India’s fuel demand in October declined by 1.4% from a year ago, and its diesel consumption fell by the steepest in about three years, government data showed on Thursday.