Russia again becomes top oil supplier in August – Gudstory

This was 23.15% higher than imports in July and on a year-on-year basis, Russian imports more than doubled to $1.93 billion in August 2022.

India’s total oil import bill during the month increased by 28.27% to $11.49 billion from $8.96 billion in July. Higher imports from Iraq and Saudi Arabia supported the overall increase in supplies.

The value of imports from Iraq and Saudi Arabia was $2.33 billion and $2.07 billion, up 32% and 47% respectively compared to July. However, supplies from both countries were about 40% lower than in August 2022.

Analysts said the increase in imports came amid increased rebates offered by Russia.

In volume terms, the share of Russian oil in the Indian crude oil basket was 39%, accounting for 7.63 million tonnes of the 19.54 million tonnes imported by India in August.

Russia has emerged as the biggest supplier of oil to India in the last 20 months by offering concessional oil amid sanctions imposed by the West in retaliation for the attack on Ukraine.

In FY22, the share of Russian oil in India’s total oil imports was only 2%; In FY23, this was almost a quarter of the 235.52 million tonnes of crude oil imported by India. Now it is 39%.

Imports increased despite production cuts announced by Russia to prop up prices. Oil prices, which had fallen from multi-year highs last year, rose again in August and September amid supply cuts by OPEC+ and its key members Russia and Saudi Arabia.

The Indian crude oil basket, which averaged $80.37 per barrel in July, rose to $93.54 in September. On October 17, the basket price was $ 91.03 per barrel. At the time of writing, Brent’s December contract on the Intercontinental Exchange (ICE) was trading at $91.43 per barrel, up 1.70% from the previous close.

A recent report from Moody’s Investors Services said rising feedstock costs and stagnant retail fuel prices could weaken the profitability of oil marketing companies.

The report said OMCs’ marketing margins, the difference between their net realized prices and international prices, have already weakened significantly from the high levels seen in the quarter ending June 30, 2023.

Marketing margins on diesel have turned negative since August, while petrol margins have declined significantly over the same period due to rising international prices.

The oil market has become volatile over the past week following attacks by Hamas in Israel and subsequent attacks by Israeli Defense Forces on the Gaza Strip.

The Israel-Hamas conflict and the prospects of further instability in West Asia, a major source of oil for the world, have raised concerns in the oil market.

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Updated: October 18, 2023, 10:33 PM IST