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How Russian Oil Fuels India's Crude Refining Expansion
How Russian Oil Fuels India's Crude Refining Expansion
Sputnik India
With the consumption of natural gas and petroleum on the rise in India, the world's largest democratic country is looking to expand its annual oil refining capacity.
2024-09-19T18:29+0530
2024-09-19T18:29+0530
2024-09-19T20:34+0530
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Crude from Russia is playing a key role in India's decision to beef up its oil refining capacity because the Eurasian state's Urals grade is the most sought-after in the South Asian country, an energy expert told Sputnik India.India is the third-largest importer of crude oil, with over 80% of its requirements being met through imports. Additionally, with the festive season in India just around two weeks away, the country is expecting a surge in demand.To meet the growing appetite for crude in the short term and as part of its long-term strategy, India has already laid out plans to expand its refineries.At present, India refines approximately 5.04 million barrels per day (bpd) or 252 million metric tons annually.Russian oil has found its destination in a majority of Asian countries including China and India, Arpit Chandna, an energy specialist with Refinitiv, stated.He noted that in August, of the total Russian crude flows amounting to 1,144.3 kilotons (KT), approximately 8,870.77 KT were shipped to Asia.Furthermore, the country has been India’s leading energy supplier since the since the second half of 2022, Chandna emphasised.The oil and commodities commentator noted that, as of September 2024, India has imported a significant portion of its crude oil from Russia, accounting for nearly 40.2% of its overall oil basket.He believes that the conclusion of the monsoon season and the onset of the festive season in India will undoubtedly stimulate domestic activities, leading to a higher fuel demand.Separately, America's oil flow to Asia has declined by 289,000 BPD (barrels per day) in September and currently sits at 1.5 million BPD per month. This has made it easier for Russian crude to fill the supplier gaps in a demanding region like India, he explained.In the coming months, India aims to capitalise on the current low oil prices and stockpile reserves at its expanding storage facilities. The expert stressed that Russia will play a crucial role in the India's crude oil stockpiling, as its Urals grade oil has become one of the most sought-after commodities in the country.
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How Russian Oil Fuels India's Crude Refining Expansion
18:29 19.09.2024 (Updated: 20:34 19.09.2024) With the consumption of natural gas and petroleum on the rise in India, the world's largest democratic country is looking to expand its annual oil refining capacity.
Crude from Russia is playing a key role in India's decision to beef up its oil refining capacity because the Eurasian state's Urals grade is the most sought-after in the South Asian country, an energy expert told Sputnik India.
India is the third-largest importer of crude oil, with over 80% of its requirements being met through imports. Additionally, with the festive season in India just around two weeks away, the country is expecting a surge in demand.
To meet the growing appetite for crude in the short term and as part of its
long-term strategy, India has already laid out plans to
expand its refineries.At present, India refines approximately 5.04 million barrels per day (bpd) or 252 million metric tons annually.
"Now, projects are in place to take it up to 300 million metric tons per annum [6 million bpd]. We are brainstorming whether we should take it to 400 or 450 [million]," Oil Minister Hardeep Singh Puri said earlier this week.
Russian oil has found its destination in a majority of Asian countries including China and India, Arpit Chandna, an energy specialist with Refinitiv, stated.
He noted that in August, of the total Russian crude flows amounting to 1,144.3 kilotons (KT), approximately 8,870.77 KT were shipped to Asia.
Furthermore, the country has been India’s leading energy supplier since the
since the second half of 2022, Chandna emphasised.
"Since India is now looking to expand its storage capacity it would look towards its regular suppliers for additional volumes. There's little doubt that for the past few years, Russia has been India's most reliable crude supplier, regularly topping the country's list in this department month after month both in 2023 and 2024," he asserted.
The oil and commodities commentator noted that, as of September 2024, India has imported a significant portion of its crude oil from Russia, accounting for nearly 40.2% of its overall oil basket.
He believes that the conclusion of the monsoon season and the onset of the festive season in India will undoubtedly
stimulate domestic activities, leading to a
higher fuel demand.
"On the economic front, India's August WPI (wholesale price index) cooled off by 1.31% compared to the previous month, and industrial output stood at 4.8%, which is higher than in July, indicating a better and healthier state of energy consumption in the country," Chandna added.
Separately, America's oil flow to Asia has declined by 289,000 BPD (barrels per day) in September and currently sits at 1.5 million BPD per month. This has made it easier for Russian crude to fill the supplier gaps in a demanding region like India, he explained.
In the coming months, India aims to capitalise on the current low oil prices and stockpile reserves at its expanding storage facilities. The expert stressed that Russia will play a crucial role in the India's
crude oil stockpiling, as its Urals grade oil has become one of the most sought-after commodities in the country.
"Similarly, the doubling of its capacity to refine oil annually is almost certain to increase oil imports from Russia. After all, India has been very vocal in choosing suppliers in the interest of the country's energy security," Chandna concluded.
