2024-01-29 15:27:02
India’s crude oil imports increased in December due to sustained demand, according to data from the Petroleum Planning and Analysis Cell (PPAC).
Crude imports in December rose 1.1% year-on-year to 19.83 million metric tons, the data showed, up 7.4% on a monthly basis.
Fuel consumption in India, the world’s third-largest oil importer, hit a seven-month high in December.
“There is a general economic recovery which is contributing to the increase in imports,” said Prashant Vasisht, vice president and co-head of corporate ratings at ICRA.
Crude oil futures have lost more than 10% in 2023 during a tumultuous year marked by geopolitical unrest and concerns over major producers’ oil production levels. [O/R]
Besides increasing Indian oil demand, falling crude prices have also supported imports, said Giovanni Staunovo, an analyst at UBS.
Indian imports of Nigerian crude surged from November to December as the country benefited from Nigeria’s large surplus cargoes, data showed.
Data from the CAPP website also showed that product imports decreased by 4% to 3.89 million tonnes compared to December last year, while product exports increased by 2.5%. during the same period to reach 5.84 million tonnes.
An interesting trend “is the sharp increase in diesel exports. I assume that most of these exports ended up in Europe, as EU countries banned imports of Russian oil,” Staunovo added.
Exports of diesel, mainly used by commercial trucks and passenger vehicles, jumped 18% from last year to 2.84 million tonnes.
The European Union has introduced bans on imports of crude oil and petroleum products transported by sea from Russia due to the conflict in Ukraine.
Freight costs have risen sharply as ships have been diverted from the Red Sea to longer routes due to attacks by Yemen’s Iran-backed Houthi group. Shipping costs between Asia and Europe have increased by 350%, according to Goldman Sachs.
India’s Hindustan Petroleum Corp Ltd said it did not expect a supply disruption due to the Red Sea crisis.
“Some of India’s crude goes through the Suez Canal. As of now, there is not much impact, but if the situation worsens, there will be an impact,” Vasisht said.
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