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Imports of Russian crude oil to India last month posted a substantial increase of 80% on the year, after a dip over the summer.
Citing data from Vortexa, Indian media reported the subcontinent had taken in an average of 1.56 million barrels daily of Urals crude in September, up from 865,000 bpd a year ago. Compared with August, the September import rate was 8% higher.
According to Kpler data, total crude oil imports into India from Russia in September stood at 1.8 million barrels daily, which compared with 977,000 barrels daily a year ago.
“Indian refiners have been tacitly lamenting about Urals trading at -$4 per barrel to Brent on a delivered basis, however given the robust pull on Russian crude from China, the differentials on Russian barrels will not be coming down anytime soon. Urals at that price is still $6 a barrel lower than anything term-supplied from the Middle East,” Kpler’s lead crude analyst Viktor Katona said.
LSEG, meanwhile, estimated the average Indian intake of Russian crude for last month at 1.55 million bpd, estimating it represented a 16% increase on August.
Indian refiners also imported more crude from Iraq, with shipments from OPEC’s second-largest producer in September up by 17% to 1.1 million barrels daily, Reuters reported.
At the same time, oil shipments from Saudi Arabia declined last month, to 676,000 bpd, which was 10% lower than the average for August.
Kpler’s Katona has forecast that crude oil imports from Russia could rise further in the coming months after the maintenance season ends at the end of this month. This suggests that even at elevated prices, Russian crude remains affordable for Indian refiners, unlike Saudi crude, whose price has been affected by Riyadh’s voluntary production cuts.
“I think India will stick to its September levels of buying further on, importing 1.8-1.9 million barrels a day,” Katona India’s Financial Express.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com