OIL IMPORTS – ECONOMY
News: Russia
remains India's top oil supplier for second month in a row in November
What's in the news?
● Russia
has for the second month in a row remained India's
top oil supplier in November, surpassing traditional sellers Iraq and Saudi
Arabia, according to data from energy cargo tracker Vortexa.
Key takeaways:
● Russia,
which made up for just 0.2% of all oil imported by India in the year to March
31, 2022, supplied 9,09,403 barrels per day (bpd) of crude oil to India in
November. It now makes up for more than
a fifth of India's oil supplies.
● According
to Vortexa, an energy intelligence firm, India imported 8,61,461 bpd of oil
from Iraq in November and 5,70,922 bpd from Saudi Arabia. The United States was
India's fourth largest supplier at 4,05,525 bpd.
● India's
imports from Russia in November were lower than the volumes bought in October.
Reasons for Russian surpass:
● India's
appetite for Russian oil swelled ever since it started trading on discount as the West shunned it to punish Moscow for its
invasion of Ukraine.
● The Indian government has
been vehemently defending its trade with Russia, saying it has to source oil
from where it is the cheapest.
Issues ahead:
● The executive body of the
European Union has asked its 27 member countries to cap the price of Russian
oil at USD 60 a barrel as part of the West's attempt to squeeze Moscow's oil
revenues and limit its ability to wage war in Ukraine while keeping global
prices and supplies steady.
● From
December 5, western shipping and insurance companies are prohibited from
handling Russian oil sold above the price cap.
● However,
ships loaded with Russian oil before December 5 and unloaded at their
destination before January 19, will not be subject to the price cap.
● The
imports in November were made ahead of a price cap agreed by the EU on Russian
seaborne oil.
Government's take:
● But
the Government has indicated that oil companies will continue to buy oil from
Russia outside the price cap.
● External
Affairs Minister S. Jaishankar on December 7 told the Rajya Sabha that Indian
refiners will continue to look for the best deals in the interest of the
country.
Go back to basics:
● After the U.S. and China,
India is the world’s third-largest consumer of oil, over 85 percent of which is
imported.
● India,
the world’s third-biggest oil-importing and consuming nation, has long defended
purchases of crude oil from Russia following President Vladimir Putin ordering
the invasion of Ukraine.
● The
bulk of supplies come from the Middle East and the US.
● Imports
include oil which it converts to petroleum products after refining.
● India exports petroleum
products - accounting for more than 13% of its total exports - to more than 100
countries.
● India
has taken advantage of discounted prices to ramp up oil imports from Russia at
a time when global energy prices have been rising.
Present stats (November 2022):
India
imports oil from the country as follows (top to bottom).
● Russia
● Iraq
● Saudi
Arabia
● US
● Nigeria.