By Nidhi Verma
NEW DELHI (Reuters) -The share of Middle Eastern oil in India’s overall crude imports rebounded to a 16-month high in November as refiners shunned costly Brent-linked long haul grades, tanker arrival data obtained from trade sources showed.
Imports of Middle Eastern oil by the world’s third biggest oil importer and consumer surged to 3.07 million barrels per day (bpd), the most in 11 months and about 71.1% of country’s overall oil imports, the data showed.
On the other hand, the share of African oil plunged to a 16-month low of around 9.7%, or about 419,000 bpd, the data showed.
India’s oil imports totalled 4.32 million bpd oil in November, up 6.4% from October and 9.2% from a year earlier, the data showed, as refiners cranked up runs to meet rising fuel demand amid a recovery in refined fuel cracks.
“Most Middle Eastern producers had reduced official selling prices for October and November so it made sense to go for nearby crudes rather than Brent-linked oil,” said Ehsan Ul Haq, an analyst with Refinitiv.
He noted that the Brent price had been very strong in October and November as demand from Europe recovered and refiners increased utilisation rates.
That widened Brent crude’s premium to Dubai swaps, or the price spread between low- and high-sulphur crude, to $4.25/ barrel in October, he added.
Shipments from Africa take about 35 days to reach India, and refiners tend to buy oil around two months ahead of processing.
India mostly relies on the Middle East for heavy oil imports and ships in lighter sweet crude from Africa. Upgradation of plants allows refiners to increase processing of cheaper heavy oil to maximise margins.
Higher imports from the Middle East lifted the share of oil from the Organization of Petroleum Exporting Countries (OPEC) in India’s overall oil imports to a 15-month high of 78% in November.
However, between April and November, the first eight months of this fiscal year, the group’s share declined to the lowest on record.
(Reporting by Nidhi Verma; Editing by Kirsten Donovan)
