Crude Oil and LPG Supplies to India Show Improvement in May
NEW DELHI: After experiencing a decline in March and April due to supply issues linked to conflicts in West Asia, India saw a recovery in crude oil and LPG supplies in May. Although this increase was promising, the levels were still below what they were before the conflicts began, according to ship-tracking data from Kpler.
Crude imports for India dipped from 5.2 million barrels per day (mbd) in February to 4.5 mbd during March and April. However, in May, imports bounced back slightly to approximately 4.9 mbd. LPG supplies also saw improvement as the government diversified its sources. Notably, natural gas supplies rebounded significantly, exceeding the volumes received in February.
In terms of sourcing, data indicated that Russia remained India’s primary crude supplier. During a time of market uncertainty, Russian crude has provided a much-needed security of supply. Meanwhile, flows from West Asia have been inconsistent, especially from Iraq and Kuwait. In a noteworthy shift, the UAE emerged as the second-largest oil supplier to India in May, followed by Saudi Arabia, Brazil, and Venezuela.
Sumit Ritolia, the lead analyst at Kpler, stated, “One of the most remarkable trends over the last three months is the stability of Russian crude supply to India. This has given Indian refiners a combination of favorable pricing, consistent availability, and logistical ease when many traditional suppliers faced challenges.”
This steady supply from Russia has helped India lessen its risk from potential disruptions in the Strait of Hormuz, reducing the urgency to seek oil from higher-cost suppliers in the Atlantic Basin.
On the LPG front, supplies from West Asia have remained disrupted due to the closure of the Strait of Hormuz. Imports sharply decreased from over two million tonnes per month in January and February to around 1-1.2 million tonnes between March and May due to lower availability from Gulf countries. However, increased shipments from the US, boosted domestic production, and effective demand management have enabled India to meet its cooking gas needs.
Despite a slight dip, the consistent supply of LNG, along with local production, has kept India’s LNG stocks at adequate levels. Kpler reported that Qatar’s share in India’s LNG imports has significantly decreased, while the US, Oman, Nigeria, and Angola have become more crucial sources.
Overall, Ritolia noted, “India has navigated supply disruptions through a blend of diversified sourcing, increased arrivals from the Atlantic Basin, inventory management, and adjustments in demand.” He added that if disruptions continue, India may increasingly depend on crude from Russia, the US, Africa, and Latin America.
