The share of India’s oil imports from OPEC dropped to their lowest in at least 20 years in the fiscal year ended March 2021 as the world’s third-largest oil importer saw total imports drop and sought to diversify its oil suppliers, according to industry and trade obtained by Reuters.
In the 2020/2021 fiscal year, India’s overall oil imports fell by nearly 12 percent compared to the previous fiscal year and averaged around 3.97 million barrels per day (bpd), according to the trade and industry data cited by Reuters.
Of all those imports, the share of OPEC slumped to 72 percent from 80 percent in the 2019/2020 fiscal year—the lowest share of crude oil imports from OPEC since at least 2000/2001.
The lower overall crude oil imports between April 2020 and March 2021 are not surprising, considering the reduced demand for fuel and lower refinery runs in India—and everywhere in the world—at the onset of the COVID-19 pandemic in the spring of last year.
India’s oil demand is estimated to have declined in 2020 for the first time in more than 20 years due to the pandemic.
According to the data from the Petroleum Planning & Analysis Cell (PPAC), India spent US$61.9 billion on crude oil imports in April 2020-March 2021, down from US$101.4 billion in 2019/2020.
While some of the lower import bill was due to the lower imported volumes, most of the drastic decline in India’s spending on crude was because of the ultra-low oil prices in the spring of 2020. Back then, India—and the other major importer in Asia, China—embarked on a buying spree to stock up on low-priced crude.
As oil prices rallied in recent months, India expressed its frustration with the OPEC+ decisions to keep markets tight, calling out OPEC+ for its “artificial cuts to keep the price going up.”
India’s sensitivity to high oil prices resulted in the government asking Indian state refiners to aggressively diversify oil imports away from the Middle East and its oil kingpin Saudi Arabia.
In February 2021, India boosted significantly crude oil imports from the United States. Meanwhile, it slashed purchases from the world’s top oil exporter, Saudi Arabia, to the point of America overtaking the Saudis as India’s second-largest oil supplier.
By Tsvetana Paraskova for Oilprice.com
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