Iraq follows Russia as second largest oil supplier to India
Data issued by the Indian Ministry of Commerce and Industry revealed that Iraq was the second-largest oil supplier to India, after Russia, in December 2023. According to the figures, the cost of Russian crude oil exported to India decreased to $77.82 per barrel, compared to $79.34 per barrel for oil shipments imported from Iraq. Iraq and Russia are considered the largest suppliers to India, which is the third largest oil-consuming country in the world. Oil refineries in India have been rushing to buy low-priced Russian oil since early 2022, when the invasion of Ukraine caused some buyers to avoid buying Russian oil. Oil shipments exported from Russia have become relatively more expensive since the middle of 2023, trading at levels very similar to shipments exported from Iraq. Oil imported from Saudi Arabia, the third-largest supplier to India, is considered the most expensive among these countries. The average price of crude oil exported from Saudi Arabia reached $87.19 per barrel in December 2023.
India emerges as top buyer of Venezuelan crude oil in December, January
After a gap of three years India emerged as the top buyer of Venezuelan crude for two consecutive months of December 2023 and January 2024, as per shipping fixtures and ship tracking data. Indian refiners had stopped oil imports from the Latin American country in 2020 after the United States (US) imposed sanctions on Caracas. With Washington temporarily easing restrictions on Venezuela’s oil sector in October 2023, Indian refiners — mainly Reliance Industries (RIL) — are back in the market for Venezuelan oil that is likely available at a discounted price. Crude oil dispatches from Venezuela to India in December were almost 191,600 barrels per day (bpd), while in January, the loadings rose to over 254,000 bpd — nearly half of the Latin American nation’s total oil exports of almost 557,000 bpd for the month, according to data from commodity market analytics firm Kpler. The data shows that Venezuela last dispatched crude oil to the South Asian country in September 2020, with the last of the deliveries at Indian ports in November of that year. India — specifically private sector refiners RIL and Nayara Energy (NEL) — was a regular buyer of Venezuelan crude prior to imposition of US sanctions in 2019. Following the sanctions, oil imports from Venezuela stopped within a few months. As per India’s official trade data, Venezuela was New Delhi’s fifth-largest supplier of oil in 2019, providing close to 16 million tonnes of crude to Indian refiners. In October 2023, the US eased sanctions on Venezuela’s petroleum sector, authorising oil exports without limitation for six months. Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), has the largest proven oil reserves in the world. Petroleum Minister Hardeep Singh Puri has maintained for long that India is willing to buy Venezuelan oil if the economics are favourable. Given the volatility in the oil markets over the past nearly two years, the government has held the view that India will buy cheaper oil from the available sources.
BPCL to set up first-ever green hydrogen plant in an Indian airport
Indian refiner Bharat Petroleum Corp Ltd (BPCL) said on Wednesday it will set up the first-ever green hydrogen plant inside an airport in the country. BPCL said it would build and operate a 1,000-kilowatt green hydrogen plant inside Cochin International Airport, which will contribute land, water and green energy resources. The initial output will be used to power vehicles in the airport, which is in the southern part of the country, BPCL said. Green hydrogen, which is produced from water using renewable energy sources, is recognised as a future fuel and aligns with carbon-neutral strategies. Indian companies are investing billions of dollars to reduce emissions to meet the country’s goal of net zero emissions by 2070. India is also expanding the use of biofuel in its transport sector to achieve this goal. BPCL plans to invest $18.16 billion over the next five years to grow its oil business and expand its renewable energy portfolio as it aims for a 2040 net zero goal.
India’s oil & gas import bill likely to double in 15 years: PPAC
The country’s primary energy demand, which is projected to almost double to 38.5 million barrels of oil equivalent per day (mboe/d) by 2045, will see the growth percentage of renewables being the highest at 11.5%. However, the share of oil- and coal-based power will remain at the top at 30.1% and 33.2%, respectively, as per the report by the Petroleum Planning and Analysis Cell (PPAC). “While demand for all energy sources will increase during this period, oil will account for the largest part of the growth as the country’s demand for oil products will more than double from 5.1 mboe/d in 2022 to 11.6 mboe/d in 2045,” the report said. The country’s oil consumption is likely to jump to 305 million tonne of oil equivalent (Mtoe) in 2030 from 210 Mtoe in 2020, as per S&P Global Commodity Insights. Gas consumption will register a rise to 70 Mtoe in the same period against 53 Mtoe in 2020. As domestic supplies remain limited, the country’s oil imports will exceed 90% of demand by 2030 at 280 Mtoe and gas imports are projected to surpass 60% of supplies at 44 Mtoe, as per the PPAC data. India already spends more than $160 billion of foreign exchange every year on energy imports, according to government statistics. “The import bill is likely to double in the next 15 years without steps to reduce this import dependence. Higher imports will put a further burden on government finances,” the report said. Crude oil and products import bill till December of FY24 stands at $115.69 billion, as per the PPAC data. Moreover, the renewed interest in the country’s exploration and production field from international oil and gas companies is likely to have only a limited impact as these companies are seen reducing their investments in the oil and gas sector while transitioning to green energy. With limited investments and no major discoveries, the oil and gas sector remains under the shadow.