NEW DELHI (CU)_The United States became India’s second biggest oil supplier after Iraq last month, while Saudi Arabia was pushed back to No.4.
This boost in demand for crude from the North American nation was triggered by lower US crude demand, along with Saudi Arabia’s voluntary production cuts by 1 million barrel per day (bpd), on top of an agreement by major petroleum exporting countries and their allies (OPEC+) to maintain lower production.
India’s imports from the United States in February amounted to 545,300 bpd, which was a 48 per cent increase from the previous month. In contrast, imports from Saudi Arabia in the same month fell by 42 per cent from January to a decade low of 445,200 bpd. Although the Gulf nation has consistently been one of India’s top two suppliers since January 2006, however, it was slipped to No. 4 last month.
According to an analyst at Refinitiv, a subsidiary of London Stock Exchange Group, owing to trade disputes between the United States and China, Beijing has not been importing US oil and therefore, the Asian region, particularly India, was the more obvious choice.
“US demand was weak and refineries were running at low rates so the US crude had to go somewhere, and Asia is the region which has seen rapid demand recovery,” Ehsan Ul Haq said.
“China has not been taking US oil because of (the) trade problem, so India is the obvious choice,” he added.
Although oil imports from Iraq to India fell by 23 per cent to a five-month low, however, the Middle Eastern nation continues to maintain the top spot, having supplied 867,500 bpd in February. On the other hand, there was also a decline of 18 per cent in India’s aggregated oil imports in February, as the South Asian nation shipped in only 3.92 million bpd, the data showed.
According to Haq, New Delhi may have imported smaller volumes last month since it assumed that OPEC+ might ease production cuts, which would potentially lead to lower prices. India has repeatedly requested the organisation to ease supply curbs and stabilise crude markets.
India is the world’s third largest oil importer, shipping in about 84 per cent of its crude needs, and relies heavily on the Middle East.
