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Demand for Russian Oil in India Likely to Rise Further: Energy Specialist
Demand for Russian Oil in India Likely to Rise Further: Energy Specialist
Sputnik India
Russia is currently the largest importer of crude to India, holding an over 40 percent share in the country's oil basket. 03.10.2024, Sputnik India
2024-10-03T20:15+0530
2024-10-03T20:15+0530
2024-10-03T20:38+0530
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Demand for Russian oil in India, which at present is importing slightly less than 2 million barrels per day (bpd), is likely to increase further in the coming months, especially with India entering into the festive season and the central government announcing plans to expand its crude storage facilities, an energy specialist has said. He reckons that India's crude imports from Russia are expected to soar. As per August, supplies of Russian crude to India were recorded at 1.88 million bpd.Chandna highlighted that India is increasing its commercial crude oil strategic storage as part of efforts to shore up stockpiles to meet the energy needs against any supply disruption.He cited central government's plan to expand India's SPR by adding more storage facilities – 4 million ton at Chandikhol in Odisha and 2.5 million in Karnataka – that will eventually have a positive impact on oil consumption in the country. Currently, India's SPR capacity is 5.33 million tons.India's current refining capacity stands at about 5.16 million bpd and the refiners are expected to boost it to 6.19 million bpd by 2028. This indicates the vision of Public Sector Undertakings (PSU) refiners to feed more crude for producing refined products, which would increase the intake of more crude, Chandna pointed out.He observed that the current geo-political risk lingering over the Global commodities market is the unrest in the Middle East, the conflict between Israel and Iran's allies.If Israel targets Iran's crude oil production complexes it can hamper the volume in the global crude oil supply chain, he suggescted.In such cases, the weakening demand stimulus as reported by OPEC and the International Energy Agency (IEA) will be overshadowed by the fear of supply reduction, and the market is expected to witness an uneven demand recovery till the year-end at least, despite the move by OPEC+ to delay output restoration of 180000 bpd by 2 months, he concluded.
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Demand for Russian Oil in India Likely to Rise Further: Energy Specialist
20:15 03.10.2024 (Updated: 20:38 03.10.2024) Russia is currently the largest importer of crude to India, holding an over 40 percent share in the country's oil basket.
Demand for Russian oil in India, which at present is importing slightly less than 2 million barrels per day (bpd), is
likely to increase further in the coming months, especially with India entering into the festive season and the central government announcing plans to expand its crude storage facilities, an energy specialist has said.
"India which has better economic growth than other developed nations, is likely to have robust demand owing to manufacturing and improved industrial activities. The country is also stepping into the festive season where the demand is likely to rise for fuel products such as petrol and diesel," Arpit Chandna, an expert in oil trade associated with Refinitiv, a London Stock Exchange Group (LSEG) firm tracking global crude supplies and deliveries, told Sputnik India on Thursday.
He reckons that India's crude imports from Russia are expected to soar. As per August, supplies of
Russian crude to India were recorded at 1.88 million bpd.
Chandna highlighted that India is increasing its commercial crude oil strategic storage as part of efforts to shore up stockpiles to meet the energy needs against any supply disruption.
He cited central government's plan to expand India's SPR by adding more storage facilities – 4 million ton at Chandikhol in Odisha and 2.5 million in Karnataka – that will eventually have a positive impact on oil consumption in the country. Currently, India's SPR capacity is 5.33 million tons.
India's current refining capacity stands at about 5.16 million bpd and the refiners are expected to boost it to 6.19 million bpd by 2028. This indicates the vision of Public Sector Undertakings (PSU) refiners to feed
more crude for producing refined products, which would increase the intake of more crude, Chandna pointed out.
"The Russian crude arrivals are mostly traded above the West-imposed price cap and it is expected that Western sanctions will get increasingly less effective," Chandna reckoned.
He observed that the current geo-political risk lingering over the Global commodities market is the unrest in the Middle East, the conflict between Israel and Iran's allies.
If Israel targets Iran's crude oil production complexes it can hamper the volume in the global crude oil supply chain, he suggescted.
In such cases, the weakening demand stimulus as reported by OPEC and the International Energy Agency (IEA) will be overshadowed by the fear of supply reduction, and the market is expected to witness an uneven demand recovery till the year-end at least, despite the move by OPEC+ to delay output restoration of 180000 bpd by 2 months, he concluded.
