India’s oil imports in Oct rise as refiners come out of maintenance; GST cuts, travel boost demand

Data from global real-time data and analytics provider Kpler showed that import in September was 4.6 million barrels per day (bpd), compared to 5.2 million a day as of 16 October. Supplies from the five major suppliers Russia, Iraq, Saudi Arabia, the US, and Nigeria has increased to nearly 5 million bpd versus about 4 million bpd in September.

Weakened travel in the latter part of the southwest monsoons this year had also lowered demand for fuel, which now has recovered giving a fillip to oil imports for refining, said experts.

“The monsoon rains impacted travel and demand for fuels till August-September due to heavy rains, floods and landslides in some states. There is revival in travel now after the rains have receded, which may have boosted imports." said Prashant Vasisht, senior vice president and co-group head of corporate ratings at rating agency Icra.

He added that some refineries has curtailed capacity earlier for maintenance “turnaround period". “They are likely to be operating at higher capacity now, which would boost imports."

Refineries in India typically schedule maintenance shutdowns during June-September, when demand for petroleum products are comparatively lower due to the monsoon season.

Further, an industry executive, said the GST cuts has so far boosted consumption and resulted in increased transportation and logistics which has led to higher oil consumption and imports.

Data from the Petroleum Planning and Analysis Cell of the ministry of petroleum showed that in September the overall import oil stood at 20.1 million tonnes valued at $10.2 billion, and in August it was at 18.8 million tonne worth $10.5 billion.

More Russian oil, discounts

Oil imports from Russia, meanwhile, have seen an uptick so far in October after a dip last month. This comes at a time US president Donald Trump claimed that India had committed to halt Russian oil imports. India denied any such move.

Global real-time data and analytics provider Kpler's data showed that India's imports of Russian crude in September was at 1.6 million bpd, about 5% lower than 1.69 million bpd in August.

However, this month, as of 16 October, imports are running at 1.77 million bpd.

Loading of crude from Russia so far in October has also increased, indicating that supplies would continue in the coming months. Some of the crude loaded would reach India next month and would be counted in November data.

In October, in fact, discounts from Russia have increased and are in the range of $2.5-4 a barrel versus about $2 in September, an industry executive said requesting anonymity.

Similarly, as India looks to increase energy trade with the US amid the ongoing bilateral trade talks, oil imports from the US have also seen a jump in October. Imports from the US have steeply increased to 647,000 bpd of oil this month (as of 16 October) from 207,000 bpd in September, per Kpler.

This month, imports from all the major suppliers have witnessed an uptick, except from the UAE. Supplies from Iraq, Saudi Arabia, and Nigeria stand at 1.01 million bpd, 830,000 bpd, and 317,000 bpd respectively so far in October. They stood at 836,000 bpd, 630,000 bpd and 229,000 bpd in September. Imports from the UAE, however have declined in October to 394,000 bpd from 597,000 bpd in September.

Oil imports are key to the Indian economy as the country imports about 88% of its oil requirement. As geopolitical tensions and tariff wars play out, India has diversified its sources of oil imports to about 40 countries in the past three years.