Saudi Arabia & Iraq Edge Out Latin America To Sell More Oil To India

With the top producers of OPEC (The Organization of the Petroleum Exporting Countries) incurring a profit at the expense of Latin American crudes, India’s oil imports from Saudi Arabia and Iraq hit the highest in more than a decade.

In January, 2016, Saudi Arabia was the top oil supplier to India with volumes jumping 29 per cent from the same month a year ago to nearly 9,40,000 barrels per day (bpd), according to ship tracking data obtained from sources and data compiled by Thomson Reuters Oil Research & Forecasts. Just behind was Iraq at 930,000 bpd. The daily rates from both were at their highest since 2001. In contrast, total imports from Latin America fell by a quarter in January from a year ago to 706,000 bpd.

Speaking on the issue, H. Kumar, the managing director of Mangalore Refinery and Petrochemicals Ltd. said, “We are going slow in the purchase of Latin America oil and have raised supplies from the Middle East.”

Reliance Industries Ltd, the owner of the world’s biggest refining complex, has also entered into a long-term deal with Iraq to buy Basrah Heavy, a Middle East Crude. Indian refiners that have invested billions of dollars in upgrading their plants are scouting for cheaper grades such as those from Iraq and Iran to maximize gross refining margins.

India also just took over 1,70,000 bpd of Iranian crude, in January this year which is down by nearly 40 per cent from January, last year. Volumes from Iran are expected to surge from this month as Indian buyers start receiving barrels from Tehran soon after economic sanctions are lifted.