India’s Oil Imports From Russia, Saudi Fall In July On Increased Prices And Production Cuts: Report

India’s oil imports from Russia fell for the first time in nine months and imports from Saudi Arabia dipped to the lowest in two and a half years.

India witnessed a fall in it’s crude oil imports from Russia and Saudi Arabia in July. Based on the tanker data from trade and industry sources, India’s oil imports from Russia fell for the first time in nine months and imports from Saudi Arabia dipped to the lowest in two and a half years. The import cut is a result of an increase in prices as both the oil producers cut down on output and crude oil shipments.

According to a Reuters report, both China and India reported a fall in imports from Russia and Saudi Arabia in July due to OPEC+ cuts and the price rise. China is notably the world’s biggest oil importer, while India ranks as the third-biggest oil importer in the world. 

The report noted that as part of the deal among the members of OPEC (Organisation of Petroleum Exporting Countries) and it’s allies, together known as OPEC+, Saudi Arabia voluntarily decided to reduce output by an additional 1 million barrels per day (bpd) from July till September. Russia also will cut down on exports in August by 500,000 bpd as per the deal.

The data revealed that India witnessed a decline of 5.2 per cent in overall imports from June to 4.4 million bpd of oil imported in July, on account of multiple refining plants being shut down for maintenance during the rainy season. Notably, India fulfills more than 80 per cent of it’s oil requirement by imports. 

The report stated that Indian refiners who have been looking at diversification solutions for their oil import sources to cut costs started purchasing Russian oil at discounted prices when Western companies sidelined Russia due to it’s invasion of Ukraine in 2022. 

But now, Russian oil imports for India might decline in August and September, as refiners conduct maintenance at the plants. Additionally, Russia’s crude prices have crossed the price ceiling of $60 per barrel set by the European Union and G7 economies. 

Notably, Russia was the major oil supplier for India in July, followed by Iraq and Saudi Arabia. Even after the reduction in imports from Saudi Arabia, OPEC oil’s share in India’s crude oil consumption for July was the highest since March due to increased imports of oil from Iraq, the UAE, and Nigeria, the data revealed. 

OPEC’s contribution to India’s imports for the April-July period was a record low for about the last 22 years, the report noted.