OPEC is set to win a bigger share of India’s oil imports in coming decades due to the proximity of its supplies, the producer group’s head told Reuters, after its dominance was recently eroded by competition from discounted Russian oil.
The share of oil from the Organization of the Petroleum Exporting Countries (OPEC) imported by India declined from about 65% in 2022 to 50% last year, according to industry data, after New Delhi became the biggest buyer of seaborne Russian crude in the aftermath of Moscow’s invasion of Ukraine.
OPEC members and other producers must adapt to changing market dynamics due to the “redirection” of trade flows since early 2022, with more Russian oil supply to India and elsewhere in Asia, Haitham Al Ghais, OPEC’s secretary general, said in an emailed response to Reuters questions.
“OPEC Middle East producers remain ideal suppliers to the Indian market, given their close proximity. It is a perfect supplier-consumer fit, and cost efficient for all parties,” Al Ghais said, adding he sees a greater role for OPEC members in India’s development beyond oil.
OPEC supplied 54% of India’s imported oil in January, according to industry sources.
“We expect levels to rise further in the coming decades as India’s economic development continues,” Al Ghais said, adding that “many” national oil companies from OPEC members plan to invest in India’s refining sector.
India plans to expand refining capacity to 9 million barrels per day (bpd) by 2030, from 5.02 million bpd currently.
India, the world’s third-biggest oil importer and consumer, is forecast by the International Energy Agency to be the world’s biggest oil demand growth driver through 2030.