NEW DELHI (Reuters) - OPEC’s share of India’s oil imports fell to 78.3% in 2019/20, its lowest in at least 19 years, data obtained from industry and trade sources show, as refiners in Asia’s third biggest economy increased imports of U.S. and Mediterranean grades.
India, which usually imports about 80% of its needs from members of the Organization of the Petroleum Exporting Countries (OPEC), has been diversifying its suppliers as local refiners have upgraded plants to process cheaper crude grades.
The world’s third-biggest oil importer shipped in 4.5 million barrels per day (bpd) of oil in the last fiscal year to March 2020, about 0.9% less compared with a year ago, data showed.
Of that, about 3.53 million bpd came from OPEC members.
The share of OPEC oil in India’s 2019-20 crude imports might be the lowest ever as crude imports by country before 2001-02 are not available.
Graphic: OPEC's share of India's crude oil imports falls to record low here
In 2019/20 India’s overall imports declined as most refiners had shut units for upgrades ahead of stricter fuel standards effective from April 1.
Indian refiners, with storage filled to the brim, cut back crude processing and reduced imports from OPEC nations for April and May after lockdowns to slow the spread of the novel coronavirus destroyed fuel demand.
Fuel demand in Asia’s third largest economy grew by 0.2% in 2019/20, its weakest growth rate in more than two decades.
In 2019/20 Indian refiners took in a record proportion of alternate crudes, including from the United States, Latin America and the Mediterranean as a narrowing in price spreads between marker grades such as Brent and U.S. light crude helped offset shipping costs to India, R. Ramachandran, head of refineries at Bharat Petroleum Corp, said.
A narrowing of Brent crude’s premium to sour Dubai-linked grades also pushed Indians to explore new grades, Ramachandran said.
“In the last three years, refiners have invested money to enhance flexibility to process cheaper, heavier grades to improve margins,” he said.
U.S. and Mediterranean oil each accounted for about 4.5% of India’s overall imports in 2019/20, compared to 3% and 2.5% a year earlier, the data showed.
The United States emerged as the seventh biggest supplier to India in 2019/20, up from 9th a year ago.
The share of Middle East producers dropped to about 60% from 63%, the data showed.
In the last fiscal year, Iraq remained India’s top oil supplier, followed by Saudi Arabia, tanker data showed.
United Arab Emirates replaced Iran to become the third biggest supplier after India halted purchases from Tehran from May last year under pressure from U.S. sanctions. Venezuela retained the 4th spot.
Sources who supplied the data asked not to be named.
Ramachandran said Indian refiners will seek to diversify crude purchases further, but that oil from the Gulf will remain their mainstay given the region’s proximity to India and the versatility of grades offered by Middle Eastern producers.
Reporting by Nidhi Verma; editing by Barbara Lewis