By Adedapo Adesanya
The need to boost the production of diesel and jet fuel amid high prices of Middle Eastern oil is pushing Indian refiners to buy Nigerian crude oil.
This is evident as the share of African oil in India’s crude imports last month surged to 11.5 per cent from 5.9 per cent in April, data showed.
Saudi Arabia’s Aramco recently raised all of its official selling prices across Asia, Europe and the Mediterranean for July-loading cargoes and kept US differentials unchanged, with Asia-bound barrels seeing the largest increases of between $1.80 per barrel and $2.75 barrel.
India, meanwhile, is lapping up cheaper Russian barrels as it increased the amount of crude oil it imports from Russia, making the country its biggest supplier in May.
Reuters reported that Indian refiners received about 819,000 barrels per day of Russian oil, the highest thus far in any month, compared to about 277,000 in April, citing data from trade sources.
With this, Russia is in second place as it takes over from Saudi Arabia which fell into third place while Iraq remains in the zenith position.
Western sanctions against Russia for its invasion of Ukraine prompted many oil importers to shun trade with the country, pushing spot prices for Russian crude to record discounts against other grades.
That provided Indian refiners, which rarely used to buy Russian oil due to high freight costs, an opportunity to snap up low-priced crude and alternatively increase choices in Nigerian and Angolan crude grades.
Russian grades accounted for about 16.5 per cent of India’s overall oil imports in May and helped raise the share of oil from the Commonwealth of Independent States (C.I.S.) countries to about 20.5 per cent, while that from the Middle East declined to about 59.5 per cent, the data showed.
India’s oil imports in May totalled 4.98 million barrels per day, the highest since December 2020, as state refiners raised output to meet growing local demand while private refiners turned the focus to gaining from exports, the data showed.
India’s oil imports in May were about 5.6 per cent up from the previous month and about 19% from a year earlier, the data obtained from sources showed.
India has defended its purchase of “cheap” Russian oil saying imports from Moscow made only a fraction of the country’s overall needs and a sudden stop would drive up costs for its consumers.
Higher oil imports from Russia curbed OPEC’s share in India’s overall imports to 65 per cent in April.