Limited crude oil cargo from Russia, amid strong import demand from Indian refiners, aided Middle Eastern suppliers regain some of their lost market share from the erstwhile Soviet Union for the second consecutive month in September.
Analysts and trade sources noted that higher supplies from Saudi Arabia to India in September 2024 — despite the world’s largest crude oil exporter raising prices of Arab Light grade to Asia below market’s expectations — is to protect market share at a time when Asian markets are staring at low margins and demand.
According to energy intelligence firm Vortexa, the cumulative share of Middle Eastern suppliers — Iraq, Saudi Arabia, The UAE, Qatar, Oman and Kuwait — rose to around 45.86 per cent of India’s total crude oil imports of 4.703 million barrels per day (mb/ d), on a provisional basis, last month.
In August 2024, the share of traditional suppliers to the world’s third largest crude oil importer stood at roughly 43.38 per cent of the total imports of 4.172 mb/d. Middle East’s share in total crude oil imports during July at 38.37 per cent is the lowest so far in 2024.
Vortexa’s Head of APAC Analysis, Serena Huang, told business line “India’s imports of Middle Eastern crude have risen in recent months. Although Russian crude remains discounted to most Middle East grades, their limited supplies have driven refiners to increase imports from the Middle East to meet their crude import demand.”
Middle East adds muscle
As per Vortexa data, India procured around 2.16 mb/d crude oil from Middle East, a growth of more than 19 per cent month-on-month (mom). In September 2023, India purchased roughly 1.10 mb/d from the Middle East.
Middle Eastern suppliers clocked a record share of almost 51 per cent in January this year (4.917 mb/d total imports by India), the highest in the current calendar year so far. This was followed by the second highest share in 2024 at 48.12 per cent (4.325 mb/d of total imports) a month later.
Between March to July, the Middle East suppliers consistently lost the market share to Russia.
India’s imports of Russian crude rose almost 12 per cent mom to hit almost 1.80 mb/d in September. However, Russia’s overall exports were flat. “Russian crude exports in September have totaled 3.23 mb/d, relatively flat versus August exports of 3.16 mb/d,” Huang said.
However, their crude imports from Russia are expected to rebound in October with more supplies returning to the market. It is to be noted that Saudi Arabia will also have more supplies on hand as its domestic power generation requirement wanes from September onwards.
That apart, the looming fear of OPEC+ production cuts also continue to weigh on the markets.
Another development worth noting is the decline in imports from the US. “India’s crude imports from the US reached a high of 3,70,000 barrels per day (b/d) in August, but have declined by 40 per cent in September. The US to Asia crude arbitrage has closed amid stronger demand from Europe. US crude loadings to India in August and September continue to decline, which will see lower imports into India in the months ahead,” Huang projected.