India, China’s crude oil imports from Russia in May breach all-time highs, shows shiptracking data
India and China’s purchases of Russian crude oil in May are seen to have breached all-time highs. As buyers including these two big economies gorged on discounted supplies from Russia, it led to a fall in demand for oil from the Middle East and Africa, news agency Reuters reported citing shiptracking data. China, world’s No. 1 crude importer, India (world No. 3) are top buyers of Russian oil. In May, these two imported about 110 million barrels in May from Russia. This was a nearly 10% jump month on month and came despite American warnings against price cap evasion. Arrivals of Russian shipments in India are assessed to have reached a record high of 8.6 million tonnes (62.8 million barrels) while China is expected to have received 6 million tonnes, steady from April, Reuters said based on Vortexa data. Data from Kpler, another big tracker, showed a similar trend. As per Kpler, India’s imports touched a record of 66.7 million barrels and China’s was at 49.2 million barrels. According to the data, Indian refiners increased purchases of medium sour crude Urals and lighter grades such as Sokol and Varandey, in addition to a steady inflow of ESPO crude exported from the Pacific port of Kozmino. China, where refiners are pushing to cut feedstock costs and improve refining margins amid a slower-than-expected economic recovery, has bought more and more Russian oil in recent months. “Chinese buyers’ increased demand for Russian oil loading in April and beyond was supported by higher profitability of supplies amid softer freight and firmer differentials,” Reuters said quoting a trader. The lumpsum freight rates for tankers carrying crude from Russia’s Far East port Kozmino, a major ESPO export hub, to northern China fell to $2.2 million after hitting an all-time high of $2.4 million in mid-March, Simpson Spence Young data on Refinitiv Eikon showed. The rise in Russian supplies comes ahead of a meeting between OPEC and their allies including Russia on June 4. Producers face some pressure to act to support Brent futures which have fallen 5% this week to about $73 a barrel despite an OPEC+ pledge in April to cut more output from May.
Domestic natural gas price to remain steady at $6.5 per mmbtu in June: Oil ministry
The domestic natural gas price will remain steady at $6.5 per mmbtu in June, according to an oil ministry notification. Domestic natural gas price is determined every month as 10% of the average price of the India basket crude for the previous month. The gas price, as per the formula, fell to $7.58 per mmbtu for June from $8.27 in May. But since the gas price must stay within a Cabinet-determined band of $4-$6.5 per mmbtu, the effective price for June will not change. This price band applies only to gas produced by the fields operated by Oil and Natural Gas Corp and Oil India.
Gas import bill at USD 1.4 billion in April
India’s LNG import bill stood at USD 1.4 billion in April, up from USD 1.3 billion in the corresponding month of the previous financial year. In volume terms, India imported 2,213 MMSCM of LNG in April, down from 2,078 MMSCM in the corresponding month of the previous financial year.
Russia’s share in India’s crude oil imports soars to 19% in FY23
Russia’s share in India’s crude oil imports soared to 19.1% from 2.0% a year ago, the Reserve Bank of India (RBI) says in its latest annual report. “In 2022-23, there was a change in the sources of India’s crude imports. Russia’s share in India’s crude imports soared to 19.1 per cent from 2.0 per cent a year ago,” the RBI said. The country-wise import data shows Russia gaining the biggest share of the crude pie in FY23, while crude oil imports from Saudi Arabia and the U.S. showed a slight decline. The crude oil imports from Iraq and the U.A.E. remained almost the same as the previous fiscal year. Moreover, India’s combined crude oil imports from other nations declined in FY23 as compared to FY22. In value terms, crude oil imports were the highest in December 2022 at slightly less than $20 billion. In volume terms, crude oil imports were the highest at over 30 million tonnes in December, followed by March 2022 at over 25 million tonnes. The Centre for Research on Energy and Clean Air (CREA), an advocacy and research group that claims to have started in Helsinki in December 2019, accuses five countries led by India and China of ‘laundering’ sanctions against Russia by importing crude from Russia and selling refined products in ‘price cap coalition’ countries, mostly in Europe. Terming the five oil-exporting countries — China, India, Turkey, United Arab Emirates, and Singapore as “laundromat countries”, the report says India exported the highest volume of oil products to price cap coalition countries, one year since Russia’s invasion. India shipped 14.8 million tonnes, representing a 2.4% increase on the prior year in volume terms but a 48% rise in value terms. UAE, China, and Singapore followed as the largest oil products exporters one-year post-invasion, selling 14.2 million tonnes, 7.5 million tonnes, and 7.1 million tonnes respectively to price cap coalition countries. India’s imports from Russia range from petroleum and other fuels, fertilisers, coffee, tea, and spices. The price of crude oil and petroleum products in the international markets fluctuates depending on various factors i.e. demand-supply, geopolitical factors, and other market conditions. The prices of petrol and diesel in the country are linked to the prices of respective products in the international market and not to the crude oil prices. While the crude oil prices have declined from $84.67/bbl in January 2022 to $80.92/bbl in January 2023, international product prices of petrol have slightly gone down from $96.16/bbl to $95.59/bbl and prices of diesel have increased from $97.09/bbl to $111.22/bbl during the corresponding period, the government data shows.