India's Oil Imports Rise
India's imports of Middle Eastern crude oil surged to about 2.8 million barrels per day (bpd) in September. This return to pre-war levels represents a big increase from 32% in August. Ship tracking data from both Livemint and Moneycontrol shows that Middle Eastern crude now makes up about 54% of India's total oil imports, up from 32% the previous month.
In contrast, India's Russian oil imports fell by 14% month-on-month to around 1.8 million bpd. The share of Russian oil in India's overall purchases dropped to 33.5% from 46.6%. This decline is due to increased competition from Chinese refiners and narrowing price premiums on Russian oil. An Indian refining source noted that the landed cost of Russian oil is now similar to some Middle Eastern grades, especially Iraqi oil.
Refiners are expected to keep prioritizing Middle Eastern crude. This is because of shorter voyage times and lower selling prices aimed at offsetting high freight costs. "We will buy from whoever offers us better prices," the source stated. Overall, India's total crude imports in September rose by 20% month-on-month to about 5.33 million bpd.
The shift in India's oil import strategy could affect global oil prices, especially for Middle Eastern crude. Demand from one of the world's largest importers is rising. This may also change the dynamics of the Russian oil market, particularly if competition with China continues to grow. Watch for further developments in October as refiners adjust their buying strategies amid changing market conditions.