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Record imports of cheap Russian crude into India have undermined OPEC’s share of supply to the world’s third-biggest crude importer so much that OPEC’s share of all Indian oil imports has hit the lowest in at least 22 years, according to a Reuters analysis of data from industry sources.
As India’s imports of Russian crude surged in the past year, OPEC’s share of Indian oil supply slumped to as low as 59% in the Indian financial year ending March 2023, compared to as much as 72% in the previous fiscal year 2021/2022, per the Reuters analysis.
Over the course of one year since the Russian invasion of Ukraine, India turned from a marginal buyer of Russian crude to the most important market for Moscow’s oil alongside China. Indian refiners, not complying with the G7 price cap and looking for cheap opportunistic purchases, have snapped up many of the Russian Urals cargoes, which used to go to northwest Europe before the EU embargo.
Russia has been India’s top crude oil supplier for months now and has overtaken Iraq as the top supplier for the 2022/2023 fiscal year, according to trade data cited by Reuters.
Russia accounted for nearly a fourth of India’s crude oil imports in 2022/2023 as the world’s third-largest crude importer welcomed on average 1.6 million barrels per day (bpd) of Russian crude out of a total of 4.65 million bpd of imports.
“Russian crude is already cheaper than the similar Middle Eastern grades and it seems OPEC is harming itself by a reduction in output,” Refinitiv analyst Ehsan Ul Haq told Reuters.
The additional cuts are set to further erode the OPEC market share in India, according to the analyst.
Meanwhile, India’s fuel demand is rising, and refiners continued to keep crude processing rates at near-record levels in March, government estimates showed last week.
