The UAE and the US significantly expanded their share of Indian crude imports in the first half of this fiscal year even as Russia maintained its top supplier status on the back of attractive price discounts.
The UAE’s share increased to 8% in April-September compared to 5% in the previous year, according to energy cargo tracker Vortexa. It was the fourth-largest crude supplier to India behind Russia (39% market share), Iraq (18%) and Saudi Arabia (13%). The top three suppliers lost about 0.5% each from a year earlier and maintained their rankings.
The share of the US rose to 5.5% from 4% in the previous year while Africa’s share remained nearly the same at 5%. The share of other supplying countries contracted to 10.5% from 14%. India’s overall imports rose about 4% this year.
“India’s imports of Russian crude during April-September this year were 2.5% higher compared to last year. India continues to be Russia’s largest seaborne crude export destination, with Russia’s discounted crude prices being the key driver of refiners’ robust import appetite,” said Serena Huang, an analyst at Vorexa.
Russian flows to India may slow down a bit now. “With Russian refineries expected to ramp up crude runs post autumn maintenance, the country will likely be exporting less crude compared to the first half of the fiscal year, in a similar trend we saw last year,” said Huang .
Discounts on Russian oil have radically altered the market shares of crude suppliers to India. Before the beginning of the Ukraine war in February 2022, Russia had less than a 1% share in Indian imports.
Faced with heavy Russian competition, traditional Gulf suppliers too are offering reasonable supply terms to protect their market share.
The spread between Brent and US WTI influences Indian refiners’ decision to source US crude. Orders for US crude rise when WTI is at a larger discount to Brent. Indian refiners source crude from over three dozen countries. They are ordering a lot from the spot market now and depend on global commodity traders for spot purchases.