It was aided by softening costs of Saudi Arabia’s flagship grade, Arab Gentle and declining variety of vessels ferrying Russian crude oil because of tightening sanctions by the US and Western nations.
In response to Vortexa, Saudi Arabian crude oil exports to India rose by 28 per cent year-on-year (y-o-y) and 21 per cent month-on-month (m-o-m) final month. In truth, crude oil imports to India from the Arabian nation have been the fourth highest in FY24, ending March.
Total, India’s crude oil imports fell 3 per cent y-o-y and eight per cent m-o-m to 4.46 million barrels per day (mb/d) in February as Asia’s second largest crude oil importer sourced lesser volumes from Iraq, the UAE, the US and Kuwait.
Saudis get aggressive
Vortexa’s Head of APAC Evaluation, Serena Huang informed businessline “Saudi crude’s heavy official promoting worth (OSP) reductions is probably going a robust cause for driving India’s imports of Saudi crude in February.”
For February 2024, Saudi Arabia slashed charges by fixing the Arab Gentle worth for Asia at $1.50 a barrel over Oman/Dubai, the bottom since November 2021. In January, the world’s high crude oil exporter set the worth at $2 per barrel over Oman/ Dubai. For March 2024, it has stored costs unchanged from February.
“With Saudis getting aggressive, maintaining the OSP unchanged for March, and provide woes with Russia persevering with, Center Japanese grades are more likely to proceed to get help from Indian refiners. Additionally, Saudis have gotten aggressive to counter Atlantic Basin cargoes,” commerce sources mentioned.
Alternatively, crude oil imports from Iraq fell 34 per cent m-o-m and 23 per cent y-o-y to 7,85,586 b/d in February 2024, the bottom since October 2023. Vortexa knowledge reveals that in November 2023 to January 2024, Iraqi exports averaged at over 1 mb/d.
Commerce sources mentioned that some barrels imported from Iraq throughout November 2023-January 2024 may very well be time period contracts, including to the general numbers. Apart from, India turned to Iraq as the worth of its flagship grade Basrah Medium was decrease in comparison with Saudis, averaging between $76-82 a barrel.
At the moment, Arab Gentle is buying and selling at $82.66 a barrel, whereas Basrah Medium is at $80.22.
“India’s imports of Center Japanese crude have been down m-o-m in February, however this might reverse if availability of non-sanctioned tankers to maneuver Russian crude begins changing into a constraint,” Huang defined.
Russian imports
Crude oil imports from Russia rose by 9 per cent m-o-m to 1.42 mb/d. Nevertheless, cargoes on an annual foundation declined by greater than 12 per cent final month.
The annual decline is essentially attributed to points in contacting vessels to move the essential commodity because the US and Western sanctions tighten making it tough for European shippers, notably Greek vessels, to move the commodity.
When requested in regards to the influence on sanctions and drone assaults on Russian refineries, Huang mentioned “We’re seeing an absence of shopping for curiosity in Sokol crude from Indian refiners in current months. Extra EU vessel operators are additionally leaving the Russian Urals commerce, tightening the tonnage provide. Russian crude exporters may very well be figuring out different logistics preparations to bypass the tighter tonnage provide, however the end result stays to be seen.”
Vortexa’s Freight Analyst Mary Melton in a February 29 commentary mentioned a “elementary shift” is being noticed within the measurement and profile of the fleet buying and selling Urals, which factors to growing probability of fleet constraints and the next diploma of segregation between Russian-traded and mainstream fleet.
“The change in fleet composition plus the general fleet shrinking factors to growing constraints on fleet capability, particularly as India has lately indicated an unwillingness to simply accept cargoes from sanctioned tankers,” she added.
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