Crude oil imports from Saudi Arabia at 4month high in Feb

India’s crude oil imports from its traditional source, Saudi Arabia, inched up to a fourmonth high in February 2024 at more than 8,33,590 barrels per day (b/d). It was aided by softening prices of Saudi Arabia’s flagship grade, Arab Light and declining number of vessels ferrying Russian crude oil due to tightening sanctions by the US and western countries.

According to Vortexa, Saudi Arabian crude oil exports to India rose by 28 per cent yearonyear (yoy) and 21 per cent monthonmonth (mom) last month. In fact, crude oil imports to India from the Arabian nation were the fourth highest in FY24, ending March.

Overall, India’s crude oil imports fell 3 per cent yoy and 8 per cent mom to 4.46 million barrels per day (mb/ d) in February as Asia’s second largest crude oil importer sourced lesser volumes from Iraq, the UAE, the US and Kuwait.

Vortexa’s Head of APAC Analysis, Serena Huang told businessline, “Saudi crude’s heavy official selling price (OSP) discounts is likely a strong reason for driving India’s imports of Saudi crude in February.”

For February 2024, Saudi Arabia slashed rates by fixing the Arab Light price for Asia at $1.50 a barrel over Oman/ Dubai, the lowest since November 2021. In January, India set the price at $2 per barrel over Oman/Dubai. For March 2024, it has kept prices unchanged from February.

“With Saudis getting aggressive, keeping the OSP unchanged for March, and supply woes with Russia continuing, MiddleEastern grades are likely to continue to get support from Indian refiners. Also, Saudis are becoming competitive to counter Atlantic Basin cargoes,” trade sources said.

On the other hand, crude oil imports from Iraq fell and 23 per cent yoy to 7,85,586 b/d in February 2024, the lowest since October 2023. Vortexa data shows that during November 2023 to January 2024, Iraqi exports averaged at over 1 mb/d. Trade sources said that some barrels imported from Iraq during November 2023 to January 2024 could be term contracts, adding to the overall numbers. Besides, India turned to Iraq as the price of its flagship grade Basrah Medium was lower compared to Saudis, averaging between $7682 a barrel.

“India’s imports of Middle

Eastern crude were down mom in February, but this could reverse if availability of nonsanctioned tankers to move Russian crude starts becoming a constraint,” Huang explained.

RUSSIAN IMPORTS

Crude oil imports from Russia rose by 9 per cent mom to 1.42 mb/d. However, cargoes on an annual basis declined by more than 12 per cent last month. The annual decline is largely attributed to issues in contacting vessels to transport the critical commodity as the US and western sanctions tighten making it difficult for European shippers, particularly Greek vessels, to transport the commodity.