India’s crude oil imports reach record high in January despite Red Sea shipping crisis

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India’s crude oil imports achieved an all-time monthly high in January following delays from the Red Sea shipping crisis, which impacted December arrivals from the Americas, trade sources reveal.

Additionally, January marked India’s receipt of its first cargo of Venezuelan oil in over three years, following eased sanctions by the US. Data reveals that India’s oil imports reached 5.24 million barrels per day (bpd) in January, surging by 17% from December and 3.5% higher than the same month a year ago. This surpasses the previous monthly peak of 5.1 million bpd recorded in January 2018. Trade estimates exceeded preliminary data from the oil ministry, indicating January oil imports at a 21-month high of 21.39 million metric tons (5.1 million bpd).

Due to the Red Sea crisis, certain US and Latin American oil cargoes faced delays as they were redirected around the Cape of Good Hope, landing in late December or January. An official with an Indian refiner confirmed that some cargoes scheduled to arrive in December will be delayed until January. Despite long-haul crude cargo typically being purchased on a delivered basis, Indian buyers incurred extra charges as sellers invoked a force majeure clause amid increased freight and insurance costs due to Red Sea troubles.

In January, India’s Russian oil imports rebounded to 1.47 million bpd, experiencing growth of 10.8%. However, Russia’s share of the total declined to 28% from 30%, while Latin America’s share rose to about 8% from 6%, as per the data.

Indian oil refineries have faced disruptions due to the delay of Russian light sweet Sokol oil, which has been impacted by payment issues and stricter Western sanctions. To counter these disruptions, Indian refiners have sought alternative suppliers in the Middle East. Indian Oil Corp., the country’s top refiner, has had to use its inventories to address the shortfall.

Notably, January imports from Iraq reached their highest since August 2019, elevating the share of Middle Eastern oil in India’s overall imports to 54%, up from 48% in December 2023, according to the data. The surge in Middle East imports contributed to lifting OPEC’s share in India’s intake to about 54% in January, though the average remains at its lowest on a financial-year basis.

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