OPEC Confident It Can Win Back Oil Market Share in India

OPEC expects to claw back its share of the Indian oil market in the long term, due to the short distance Middle Eastern crude has to travel to the world’s third-largest oil importer, OPEC Secretary General Haitham Al Ghais has told Reuters.  

Over the past two years, the Middle East has lost a lot of its previous market share in India as record imports of cheap Russian crude into India have undermined OPEC’s share of supply so much that the cartel’s share of all Indian oil imports has hit the lowest in at least 22 years.

As India’s imports of Russian crude surged in the past two years, OPEC’s share of Indian oil supply slumped to as low as 59% in the Indian financial year ending March 2023, compared to as much as 72% in the previous fiscal year 2021/2022, according to a Reuters analysis of data from industry sources last year. 

Early this year, data that Reuters had obtained from industry and trade sources showed that OPEC’s share of India’s crude imports slumped to its lowest level in history—to about 49.6% in the first nine months of the Indian fiscal year started in April 2023, compared to a 64.5% share for the same period of the previous fiscal year.

In response to questions, OPEC’s Al Ghais wrote in an emailed statement to Reuters,

“OPEC Middle East producers remain ideal suppliers to the Indian market, given their close proximity. It is a perfect supplier-consumer fit, and cost efficient for all parties.”

OPEC could also boost its role in India’s economic and refining industry development as many national oil companies (NOCs) of the cartel’s members plan investments in the refining sector in India, Al Ghais added.

India, for its part, expects to raise its refining capacity by 22% in five years from the current 254 million metric tons per year, which are equal to around 5.8 million bpd. The country should add 1.12 million bpd to its current total each year until 2028, oil ministry official Rameswar Teli told India’s parliament at the end of 2023.  

By Charles Kennedy for Oilprice.com

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