India’s Russian oil imports hit 4-month high in November, up 3% on month
India’s Russian oil imports in November rose to a 4-month high of 1.6 million barrels per day (bpd), up 3.1% from October, making up about 36% of the nation’s overall imports last month, data obtained from trade sources showed. Russia became India’s top oil supplier this year as the south Asian nation was drawn to Russian oil discounts after some Western companies shunned purchases from Moscow following its invasion of Ukraine in February last year. India, the world’s third biggest oil importer and consumer, has traditionally relied on Middle Eastern producers for meeting the bulk of its oil needs and rarely made purchases from Russia in the past due to high transportation costs. Last month, India overall imported about 4.5 million bpd oil, a decline of about 4.5% from October and a growth of 13% over the same month last year, the data showed. The sources declined to be identified as they are not authorised to speak to the media. Iraq and Saudi Arabia were the next top oil suppliers to India after Russia in November. Higher purchase of Russian oil has dented the share of Middle Eastern oil in India’s crude diet. The share of Middle Eastern oil in India’s November oil imports was about 46% compared with 48% in October, while that of the Commonwealth of Independent States – Russia, Kazakhstan, and Azerbaijan – rose to 39% from 36%, the data showed. In the first eight months of this fiscal year that began April 1, India’s imports of Russian oil rose by 77% to an average 1.7 million bpd, the data showed. Increased Indian imports of Russian oil have also dragged down the share of oil from the member nations of the Organization of Petroleum Exporting Countries in April-November to 48% from about 62% in the same period last year, the data showed.
Adani to invest $100 billion in green energy transition
Billionaire Gautam Adani’s group will invest USD 100 billion in green energy transition over the next 10 years across its ports, power and cement operations as it aims to become a net zero emitter by 2050. The conglomerate is expanding its renewable portfolio to 45 gigawatts as well as building three giga factories to manufacture solar panels, wind turbines and hydrogen electrolysers, it said in a statement. “The portfolio companies will be investing USD 100 billion over the next decade towards achieving energy transition,” it said. The group has set a target to become net zero by 2050 or earlier for five of its portfolio companies — renewable energy firm Adani Green Energy Ltd, power transmission utility Adani Energy Solutions Ltd, ports firm Adani Ports & SEZ Ltd, and cement makers ACC and Ambuja Cements. The portfolio businesses are actively sourcing renewables, electrifying operations and adopting biofuels, and deploying waste heat recovery and energy storage technologies. The road map to net zero transition will require last mile green hydrogen solutions, Adani Group said, adding its businesses have started pilot projects such as development of hydrogen fuel cell electric trucks as part of the switch. Detailing the decarbonisation pathway, the apples-to-airport conglomerate said it is looking to cut Scope-1 emissions by electrification of operations where possible, and adopting green hydrogen and its derivatives (green ammonia) for energy storage, heat and mobility where electrification is not possible. Scope-2 emissions would be cut through sourcing renewable electricity and deployment of waste heat recovery and energy storage technologies such as batteries and hydrogen. “Adani Group plans to invest USD 100 billion in energy transition over the next decade, with 70 per cent of the investments earmarked for clean energy,” it said. It is building giga factories to make 10 GW solar panels, 10 GW of wind turbines and 5 GW hydrogen electrolysers. “Adani’s renewables portfolio is expanding to 45 GW, which would be able to commercialize 3 million tonnes per annum of green hydrogen,” it added. Group chairman Gautam Adani had in recent days shared details of the green investments. “Our commitment to achieving 45 GW of renewable energy by 2030 initiative will help cut annual emissions by an amount equivalent to 80 million tonnes of CO2,” he said in a post on X, formerly Twitter. This reduction would be comparable to eliminating the emissions from petrol cars driving 480 billion kms each year.
Oil demand growth in India to taper in 2024 after bumper years
Oil demand growth in the key Asian market of India is set to slow next year as the spurt in consumption that followed the pandemic fades, echoing a slowdown in China and presenting a fresh headwind for prices. Consumption will expand 150,000 barrels a day in 2024, down from about 290,000 barrels a day seen from 2021 to 2023, according to Rystad Energy Head of Oil Trading Mukesh Sahdev. The drop will return growth near the pace seen from 2011 to 2019, he said. The International Energy Agency, meanwhile, sees growth halving to 100,000 barrels a day, according to its November report. Oil prices have tumbled this quarter on persistent concerns that global supplies are outpacing demand. The drop comes despite plans for deeper output cuts by the Organization of Petroleum Exporting Countries and its allies, with production expanding elsewhere, including in the US. At the same time, crude demand growth is expected to slow next year, casting a pall over the outlook. India is the third-biggest crude consumer, and a vital market for producers from the Middle East as well as from Russia, with Moscow boosting flows after the 2022 invasion of Ukraine. India’s economy has been expanding at a rapid clip — the economy grew 7.6% in the third quarter — lifting demand for gasoline, diesel and other products. While overall oil consumption is at record, the rate of expansion will ease as the one-off lift following the pandemic passes. It is a similar picture in China, the world’s biggest crude importer. In 2024, the country will consume an additional 500,000 barrels a day, according to the median of estimates from 12 industry consultants and analysts surveyed by Bloomberg this month. That’s less than a third of the increase in 2023. The more challenging outlook — coupled with skepticism about the ability of OPEC+ to deliver on planned cuts — has weighed on Brent crude, the global benchmark. After nearing $98 a barrel in late September, prices are now on course for a third consecutive monthly drop. Futures were last near $75. Consultancy FGE is also among those forecasting a slower pace of Indian demand growth in the new year. Dylan Sim, a senior analyst, sees consumption expanding by 20,000 barrels a day less than in in 2023.
Bharat Petroleum may join Reliance, IOCL to secure oil from Venezuela
India’s state-owned oil refiner Bharat Petroleum Corp may be the latest to join the list of local companies buying Venezuela oil after the US lifted sanctions in October. BPCL is looking at buying Venezuela oil, its head of refineries Sanjay Khanna said at an event on Wednesday. “Our refineries are capable of processing Venezuelan oil and we have given our international trade (department) okay to buy it,” Khanna said in an industry event. However, the imports from Venezuela will not be a threat to BPCL’s Russian oil imports, he added. Until now, Reliance Industries, Indian Oil Corp, and HPCL-Mittal Energy from India have booked cargoes of Venezuelan oil since the sanctions were lifted. India, world’s third-largest oil buyer, used to buy a lot of oil from Venezuela before the US imposed sanctions. These sanctions made Indian oil companies lose business to Chinese competitors in 2021. Since the US eased sanctions temporarily in October on Venezuela’s oil industry, people in the oil trade have been waiting to see if India will start buying oil from Venezuela again. Before the sanctions, India used to buy about 10 million barrels of oil from Venezuela every month. A company called Reliance bought an average of five very big tankers of oil from Venezuela every month during 2018-2019, according to an analyst named Viktor Katona from Kpler, a company that studies this information. Bloomberg reported earlier this month that private refiner Reliance Industries had arranged for the booking of two supertankers, namely C. Earnest and C. Genuine. These tankers are set to load crude oil shipments from Venezuela from December to early January. Another arrangement involves the Very Large Crude Carrier Eucal, hired by Reliance to transport Venezuelan crude to India in early December. Altogether, these three vessels have the capacity to carry up to 6 million barrels of crude oil.
Oil Prices Continue to Fall Ahead of the EIA Report and Fed Meeting
Crude oil prices began the day with a loss in Asian trading today as concerns about oversupply and weak demand continued to weigh on prices. Traders are also waiting for the outcome of a Fed meeting today and the Energy Information Administration’s latest weekly oil inventory report. Reuters noted in a report that recent economic data had reinforced expectations that the Fed was not going to start cutting rates in early 2024, which was translated as a bearish factor for oil since higher interest rates discourage increased consumption. Meanwhile, in more bearish news, Russian oil exports hit the highest since July, according to ANZ analysts cited by Reuters, which deepened doubts about how much of the recently agreed additional OPEC+ output cuts would actually be implemented come January. News that U.S. oil production is rising did not help matters, either, adding fuel to oversupply concerns that have flipped the futures market into a contango until the middle of 2024, according to Bloomberg. “A US-led bump in non-OPEC supply and doubts over OPEC compliance colliding with some prospects of demand softening,” is how Mizuho Bank’s Asia head of economics and strategy, Vishnu Varathan described the situation to Bloomberg. Oil prices have shed about 25% since September despite OPEC+ efforts to put a floor under benchmarks. WTI is currently trading below $70 per barrel while Brent crude has slipped below $75 per barrel. Normally, falling crude oil prices would encourage more consumption but right now it seems there is serious doubt this will be happening anytime soon. At the same time, supply perceptions have swung from deficit to oversupply in a matter of months, mostly on the back of production updates outside OPEC and especially in the U.S., where the EIA said oil supply was seen growing by 300,000 bpd in 2024.
India Aims for 20 Percent Ethanol Blending in Petrol by 2025-26
The Indian government has successfully met the target of achieving a 10 percent average blending of ethanol in petrol under the Ethanol Blended Petrol (EBP) Programme in June 2022, surpassing the scheduled target of November 2022 by five months. The next ambitious goal is set at achieving 20 percent blending of ethanol in petrol by the Ethanol Supply Year (ESY) 2025-26. This information was provided by Rameswar Teli, the Minister of State in the Ministry of Petroleum and Natural Gas, in a written reply in Rajya Sabha. According to the ‘Roadmap for Ethanol Blending in India 2020-25,’ meeting this target is estimated to replace approximately 10.16 billion litres of petrol with ethanol, resulting in significant annual savings of about USD 4 billion. Additionally, the establishment of the Global Biofuels Alliance (GBA) is expected to further propel the global biofuel market by addressing challenges, promoting sustainability, and facilitating knowledge-sharing .
Qatar’s LNG expansion to boost 2024 credit outlook – Standard Chartered
Qatar has a strong credit outlook for next year due to its liquefied natural gas (LNG) expansion and improving public finances, according to Standard Chartered. In its latest MENA Credit Outlook 2024, the bank noted that the Gulf state’s economic growth will continue next year, supported by positive indicators. During the first nine months of the year, Qatar recorded a fiscal surplus for $11.5 billion, approximately 4.9% of the GDP. Contributing to the country’s positive outlook are the country’s efforts to increase LNG production. This is in addition to a decline in government-funded capex following a period of elevated spending in the run-up to the 2022 FIFA World Cup. The bank estimates that Qatar’s debt-to-GDP should drop further, as the government continues to use sizable fiscal surpluses towards debt repayment. LNG expansion Last October, state-owned QatarEnergy started work on the North Field expansion project, which will raise Qatar’s LNG output capacity from 77 million tonnes per annum (mtpa) to 126 mtpa by 2026. “Qatar’s strategic investments in LNG production and strong fiscal indicators reinforce our positive outlook for the nation’s continued economic growth in 2024,” said Muhannad Mukahall, CEO and Head of Corporate, Commercial and Institutional Banking, Qatar, Standard Chartered. The report also noted that banks in Qatar are seeing a decline in foreign liabilities following regulatory directives by the central bank and slowing credit growth. Qatar posted strong economic growth in 2022, driven by the World Cup boom. Last November, the International Monetary Fund (IMF) said the country’s economic growth has normalised this year and that the trend will continue in the near term. Medium-term outlook will be favourable, supported by the LNG production expansion and “intensifying reform efforts”, the IMF said.
India May Ramp Up its Oil Purchase from UAE
The expectations have risen to overcome the dependence on Russia because of high Russian shipments of crude oil since Indian refiners started depending more on Russian crude in 2022. Yet Russian oil shares overall two-thirds imports of India’s oil demands. India is expected to surge its oil purchase from the United Arab Emirates in the upcoming months following discussions between the two countries on the sidelines of the ongoing COP 28 summit in Dubai. Historically, the UAE has been considered India’s third largest source of crude. In 2021, UAE, exported almost 58.5B dollar in crude petroleum. The main destinations of exports were Japan, India, China, Singapore, and Thailand. The UAE economy is heavily reliant on revenues from petroleum, and natural gas, especially in Abu Dhabi.
Gas firms seek price deregulation as city distribution targets fall behind
Irked by the slow rollout of city gas distribution (CGD) networks in India, the Petroleum and Natural Gas Board (PNGRB) has told companies to get going or risk having their bank guarantees seized. In turn, the companies have told the regulator they are wary of committing investments without the government saying the time period in which natural gas will be offered a free play in the economy, sources said. Oil and gas companies have made bank guarantees worth Rs 350 billion, and PNGRB has not said whose money could be seized but slow pace is rife.
Global oil in softening mode: Bonanza for India
Global oil prices have been softening for the past two months despite continuing geopolitical tensions. The phenomena of lower prices has defied predictions by investment agencies that had forecast oil skyrocketing in 2024. Instead, 2023 is ending with oil markets in bearish mode and the benchmark Brent crude being quoted at a low of 75 dollars per barrel. Unless the situation alters gravely over the next six months, it looks as if Goldman Sachs’ gloomy expectation of crude soaring to 100 dollars per barrel by the end of next year has little chance of becoming a reality. The current depressed state of oil markets comes after the peak of mid-October when prices had touched 92 dollars per barrel. This was a reaction to the decision by Saudi Arabia and Russia to extend their voluntary output cuts of 1.3 million barrels per day (bpd) for another three months. The momentum of higher rates could not be maintained in the following weeks due to several factors. The first is the failure to maintain production quotas by members of the oil cartel now known as the Organisation of Petroleum Exporting Countries Plus due to the addition of Russia and other allies to the group. Several members have been exceeding their listed quotas including Iran and Venezuela which are exempt due to the sanctions. Other countries like Angola and Nigeria have felt the need to produce more oil to generate enough revenues for their exchequer. The differences within the cartel came to light at the recent OPEC plus meeting where African producers were reported to be concerned over the proposed output cuts of 2.2 million bpd scheduled for the first quarter of 2024. The latest visit of Russian President Vladimir Putin to Saudi Arabia indicates the growing concern of OPEC+ leaders over the inability of the cartel to operate as a cohesive unit.