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India’s crude imports fall in February as demand slows, new virus wave looms

India’s crude oil imports fell by the most in four months in February, government data showed on Monday, as demand slowed due to rising fuel prices and as the country faces a resurgence in COVID-19 cases and potentially fresh restrictions.

India’s crude oil imports in February fell 18.3% from a year earlier to 15.24 million tonnes, the biggest year-on-year fall since October 2020, data from the Petroleum Planning and Analysis Cell (PPAC) showed.

“India is depending on its reserves for the time being and waiting for rally in oil prices to cool off,” said Amit Sajeja, a vice president at Motilal Oswal.

“However, if the decline continues in the next few months, it would become a concern indicating an economic slowdown.”

India’s fuel consumption also fell for a second straight month in February to its lowest since September, while crude oil processing retreated from levels seen in January, which were the highest in nearly one year.

The world’s third-biggest importer and consumer of oil reported its most COVID-19 cases and deaths in months on Monday and authorities reintroduced some curbs to slow the spread of the virus, especially in the western state of Maharashtra.

Meanwhile, Indian state refiners are planning to cut oil imports from Saudi Arabia by about a quarter in May, sources familiar with the discussions told Reuters last week.

The United States overtook Saudi Arabia as India’s second biggest oil supplier after Iraq last month, data from trade sources showed.

India’s oil products exports also fell 17.7%, the data showed. Diesel shipments were down 11.7% year-on-year and 9.1% from the preceding month.

Exports to European countries have also taken a hit due to the resurgence of the virus there, said Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares.
Source: Reuters (Reporting by Diptendu Lahiri and Swati Verma in Bengaluru; Editing by Subhranshu Sahu and Ana Nicolaci da Costa)

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