New Delhi: India’s crude oil imports are set to reach around 5.4-5.6 million barrels a day (b/d) in October, supported by sustained Russian supplies and higher purchases from African and Latin American countries, even as disruptions to traditional shipping routes reshape the country’s crude sourcing, according to data from Kpler, a trade intelligence firm.
Russian crude arrivals increased by around 1,00,000 b/d month-on-month to 1.97 million b/d in October, accounting for approximately 35 percent of India’s total imports. However, volumes remain well below July’s peak of 2.82 million b/d, when Russia accounted for 55 percent of India’s crude purchases, said Nikhil Dubey, lead analyst for oil markets and refineries at Kpler.
Dubey expects Russian suppliers to face further pressure in November and December as higher freight costs erode their price advantage, while Middle Eastern producers offer more competitive delivered prices and pricing concessions to defend their market share.
The changing sourcing pattern is also visible in shipments from Russia. Natalia Katona, a commodity analyst at Oilprice.com based in Abu Dhabi, said crude imports from Black Sea ports to India had fallen to around 1,90,000 b/d in October, from an average of 8,00,000 b/d during the summer months. This includes approximately 1,55,000 b/d of CPC (Caspian Pipeline Consortium) cargoes from Novorossiysk.
Novorossiysk is a major Russian port on the Black Sea and an important crude export terminal. Katona attributed the decline in shipments to growing security concerns amid the conflict, which have made the Black Sea an increasingly risky route for transporting oil.
Consequently, a larger share of Russian crude reaching India is now coming from northern export ports, including Primorsk, Ust-Luga and Murmansk, a major Russian port on the Barents Sea in the Arctic region.
However, competition for these supplies is increasing. India continues to account for around 90 percent of loadings from Primorsk and Ust-Luga, while China’s share of shipments from Murmansk rose to approximately 50 percent in August and September, against around a quarter earlier.
Katona attributed this partly to the seasonal advantage of the Northern Sea Route, which makes transporting Russian crude to China quicker and more competitive during summer and early autumn.
Angola, Venezuela gain as Gulf supplies face disruptions
Angola has recorded the biggest increase in India’s crude imports in October, with arrivals rising nearly tenfold to 3,34,000 b/d from 36,000 b/d in September, according to Kpler. Venezuelan supplies have also increased to nearly 3,40,000 b/d from 1,96,000 b/d in September.
Katona said the increase in Venezuelan shipments should not be linked to US Secretary of State Marco Rubio’s recent visit, as these cargoes were loaded in late August and early September, indicating that the purchases were already underway.
All the additional Venezuelan volumes are headed for Reliance Industries’ Jamnagar refinery complex, which has the equipment and processing capabilities to handle the country’s heavy, high-sulphur crude.
Meanwhile, arrivals from Saudi Arabia’s Ras Tanura terminal on the Persian Gulf increased to 6,25,000 b/d in October from 5,15,000 b/d in September, Katona said. But she cautioned against interpreting this as evidence of improved current oil flows through the Strait of Hormuz.
Many of these cargoes were loaded in early or mid-September and could have been held in floating storage before reaching India. A normal journey from the Gulf to India’s western coast takes around five days.
Supplies from the UAE, Kuwait and Iraq have declined as security conditions have worsened, with attacks and sinking ships adding risks for vessels operating around the Strait of Hormuz.
Overall, Middle Eastern crude arrivals stood at around 2.3 million b/d in October, compared with 2.7 million b/d in September, according to Kpler, with Saudi Arabia leading regional supplies, followed by Iraq.
Winter demand could put pressure on Russian supplies
Looking ahead, Katona expects some Russian crude supplies to shift back towards India as winter makes the Northern Sea Route increasingly difficult to navigate. The route becomes more dependent on ice-capable tankers, which are in limited supply.
However, other factors could constrain Russian exports. The absence of successful Ukrainian drone strikes on Russian refineries over the past two weeks has reduced the number of plants offline, allowing domestic refining activity to recover.
With refining crude into fuels offering better returns, more Russian oil could be retained for domestic refineries instead of being exported.
Katona expects Russia’s refinery runs to potentially increase by 5,00,000-6,00,000 b/d month-on-month. While Russia could eventually raise crude production to meet both domestic refinery requirements and overseas demand, such an increase would take time.
This could temporarily bring Russian supplies to India down to 1.5-1.6 million b/d, she said.
For India, the timing is significant as the country heads towards its seasonal peak in fuel demand during winter, requiring refiners to secure additional crude supplies.
Katona expects West African and Latin American crude to remain modest but steady alternative sources. Brazilian crude imports, in particular, could reach record levels in November, with more tankers carrying crude from the country’s offshore fields heading towards India.
Although freight costs are higher on these routes, Katona said Indian refiners may increasingly prioritise delivery reliability over crude prices. “The best crude isn’t necessarily the cheapest, it’s the crude that actually arrives,” she said.
(Edited by Viny Mishra)
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