India’s May crude oil imports rise on strong Russian flows

India’s crude oil imports in May rose 2% from a year earlier, government data showed on Friday, on sustained buying of discounted Russian fuel to cater strong demand in the country.

On a monthly basis, crude imports in May rose marginally to 20.04 million tonnes from 19.95 million tonnes in April, data from the website of the Petroleum Planning and Analysis Cell (PPAC) showed.

Meanwhile, oil product imports rose 21% to 3.64 million tonnes in May from the previous month.

“Imports should still increase at a solid pace thanks to still rising domestic demand,” said UBS analyst Giovanni Staunovo.

India’s fuel consumption, a proxy for oil demand, surged in May with diesel sales scaling a record high, buoyed by strong factory activity in the third-largest oil consumer in the world.

“But considering that Indian demand normally declines seasonally during Q2, imports can be a bit more volatile,” Staunovo said, referring to the monsoon season in the country.

For the rest of the year, Russia could account for almost a third of Indian Oil’s crude oil imports in the current financial year, an executive at the company said.

India’s Reliance Industries RELI.NS imported 12% more oil in May than in April, rising to 1.35 million barrels per day, tanker data from shipping and industry sources showed.

Indian state-run refiner BPCL was also in talks with Rosneft to buy about 43.8 million barrels of discounted Russian crude based on the Dubai benchmark, according to sources with direct knowledge of the matter, marking a shift away from the Europe-dominated Brent.

“For the month of May and June, we’re seeing more than 50% Russia imports compared to imports from Middle East on a relative basis,” said Janiv Shah, senior analyst at Rystad Energy, adding that refineries had actualized at a fairly good rate for April.

Asia’s third-biggest economy holds surplus refining capacity and exports refined fuels as well.
Source: Reuters (Reporting by Seher Dareen and Rahul Paswan in Bengaluru)