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India Could Provide Demand Support in the Tanker Market

The tanker market is looking for additional support from markets like India. In its latest weekly report, shipbroker Banchero Costa said that “2020 was overall a very negative year for crude oil trade. Total loadings in the 12 months of 2020 were down -6.2% y-o-y to 2032 million tonnes, according to vessels tracking data from Refinitiv. 2021 so far is faring even worse. In the first 8 months of 2021, global seaborne crude oil trade declined by -6.5% y-o-y to 1294 mln tonnes. What’s worst is that so far there is no sign of things turning a corner. Even in August 2021, global crude loading were at 164.2 mln tonnes, which was essentially flat (+0.4% y-o-y) on the already depressed levels of August 2020, and down -8.1% compared to (pre-Covid) August 2019”.

According to Banchero Costa, “India is the third largest seaborne importer of crude oil in the world, after Mainland China and the European Union. In 2020, India accounted for 9.3% of global seaborne crude oil shipments, compared to China’s 22% and the EU’s 19%. It was only marginally ahead of ASEAN, with also 9%. Imports into India were growing rapidly over the years, driven both by domestic demand but also due to the establishment of a large export-oriented refining industry.

Source: banchero costa &c s.p.a.

However, imports declined sharply during 2020 due to the impact of Covid-19 and associated lockdowns. India’s seaborne crude oil imports in the 12 months of 2020 declined by -6.8% y-o-y to 198.2 mln tonnes, from 212.6 mln tonnes in 2019. When it comes to last year, imports were depressed throughout the year, but particularly so in the second and third quarter. In 1Q 2020, India imported 56.1 mln tonnes of crude oil, which was still a positive +5.4% y-o-y increase. In 2Q 2020, imports decline sharply to 44.2 mln tonnes, down -16.7% y-o-y In 3Q 2020, imports into India stayed at 44.0 mln tonnes, which was again down -13.4% y-o-y from the same quarter in 2019. In 4Q 2020, imports rebounded to 53.8 mln t, which was still down -3.0% y-o-y from the same quarter in 2019”.

Meanwhile, “volumes remained below trend also in the first quarter of 2021, with India importing 51.5 mln tonnes of crude oil, which was a -8.2% y-o-y decline from the levels of 1Q 2020, and down -3.2% from the first quarter of 2019. Same same again in the second quarter of 2021, with 50.4 mln tonnes, technically up +14.0% y-o-y from the (very weak) second quarter of last year, but down -5.1% from the same quarter of 2019. Things are unfortunately not that much better in the third quarter. In July 2021 imports into India were a weak 14.0 mln tonnes, which was -2.0% down y-o-y from July 2020, and down a massive -18.0% from the 17.1 mln tonnes in July 2019. August 2021 was only marginally better, with 16.5 mln tonnes, +9.9% up y-o-y from the 15.0 mln tonnes in August 2020, but still down -6.6% from the 17.6 mln tonnes of August 2019”.

Source: banchero costa &c s.p.a.

“Overall in the first 8 months of 2021, India imported 132.4 mln tonnes of crude oil, which was up +2.1% y-o-y from the same period in 2020, although still down -6.1% from the same period of 2019. In terms of sources of imports into India, things changed a bit. The vast majority of imports were sourced from the Middle East, accounting for 61% of India’s total imports this year. The single largest supplier to India is Iraq, with 32.5 mln tonnes in the first 8 months of 2021, or 25 percent of India’s total imports. In second place is Saudi Arabia, with 20.6 mln tonnes, or 16 percent of the total. The UAE were third, with 13.8 mln tonnes, or 10 percent, with Kuwait in fourth place with 8.9 mln tonnes and 7 percent respectively. So far this year, volumes from Saudi Arabia to India declined by -15.5% y-oy, from the UAE declined by -8.4% y-oy, whilst from Iraq increased by +8.4% y-o-y, and from Kuwait +36.5% y-o-y. Otherwise, shipments from West Africa to India increased by +12.0% yo-y to 15.8 mln tonnes. From the USA to India surged by +60.1% y-o-y to 12.7 mln tonnes. From South America volumes declined by -40.7% y-o-y as no more shipments from Venezuela to India are being reported (at least officially)”, Banchero Costa concluded
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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