India’s crude oil imports from West Asia experienced a significant increase in September, returning to levels seen before the onset of the Iran conflict. According to ship tracking data, refiners capitalised on the rise in shipments from Middle Eastern producers, which alleviated supply issues that had arisen due to the ongoing war. The data indicates that India’s imports from this region surged to approximately 2.8 million barrels per day, marking the highest volume since February.

In August, imports from the Middle East accounted for 32 per cent of total crude purchases, but this figure rose markedly to about 54 per cent in September. The increase in imports reflects refiners’ strategies to secure more reliable and accessible sources of crude oil amidst fluctuating global supply dynamics.

Initially, Indian refiners had increased their intake of Russian crude to make up for the reduced availability of oil from the Middle East at the beginning of the conflict. However, as Middle Eastern supplies resumed, the reliance on Russian imports has started to diminish.

Decline in Russian Oil Imports

In contrast to the rise in West Asian crude, India’s imports of Russian oil dropped by approximately 14 per cent month-on-month, falling to around 1.8 million barrels per day in September. This decline has resulted in the share of Russian oil in India’s overall purchases decreasing from 46.6 per cent in August to 33.5 per cent in September. The shift in purchasing patterns reflects the competitive landscape in the global oil market, particularly with China also vying for Russian supplies.

Industry sources suggest that Russian oil purchases by Indian refiners are expected to remain subdued in the near future. The cost of Russian oil has become comparable to certain Middle Eastern grades, particularly Iraqi oil, which has influenced refiners’ buying decisions. The narrowing of premiums on Russian oil, now between $1 and $2 per barrel against Brent crude, contrasts sharply with previous months when premiums exceeded $10.

Refiners are now more inclined to favour discounted Middle Eastern crude due to shorter voyage times and price reductions implemented by some producers to counterbalance rising freight costs. An industry source indicated that the preference for suppliers offering better prices will guide purchasing decisions moving forward.

Overall Import Trends and Key Suppliers

India’s total crude oil imports in September rose by 20 per cent month-on-month, reaching approximately 5.33 million barrels per day. This overall increase highlights the country’s ongoing efforts to secure stable energy supplies amid changing market conditions. Despite the decline in Russian imports, Russia remains India’s largest oil supplier, followed closely by the United Arab Emirates and Iraq.

Notably, India’s imports of Iraqi oil saw a dramatic rise last month, increasing to about 830,000 barrels per day from just 171,000 barrels per day in August. This surge underscores the growing importance of Iraqi crude in India’s energy mix and reflects the shifting dynamics of oil procurement in the region.

The evolving landscape of oil imports indicates a strategic pivot by Indian refiners as they navigate the complexities of international supply chains and pricing mechanisms. The focus on securing cost-effective and reliable sources of crude oil will likely continue to shape India’s energy strategy in the coming months.

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