In January, India experienced a surge in its crude oil imports, reaching a monthly record. This increase was primarily due to the Red Sea shipping crisis, which caused delays in the arrival of cargoes from the Americas in December. Data sourced from trade outlets revealed that India, as the world’s third-largest oil importer and consumer, received its first shipment of Venezuelan oil in over three years in January. This was facilitated by the easing of sanctions on the South American producer by the United States.
The data indicated that India’s oil imports reached 5.24 million barrels per day (bpd) in January, marking a 17% increase from December and a 3.5% rise compared to the same period last year. This figure surpassed the previous monthly peak of 5.1 million bpd recorded in January 2018. The estimates from trade sources exceeded the preliminary data released by the oil ministry on Thursday, which reported January oil imports at a 21-month high of 21.39 million metric tons (5.1 million bpd).
Analyst Ehsan Ul Haq from LSEG highlighted that some U.S. and Latin American oil cargoes were delayed due to the Red Sea crisis, with some shipments being diverted to alternative routes. Consequently, Indian refiners turned to suppliers in the Middle East to mitigate disruptions caused by the delays and compensate for the diversion of Russian Sokol oil, which faced payment issues and stricter Western sanctions.
The largest Indian refiner, Indian Oil Corp (IOC.NS), relied on its inventories to compensate for the shortfall resulting from delays in receiving Russian Sokol oil. Notably, imports from Iraq surged in January to their highest level since August 2019, increasing the share of Middle Eastern oil in India’s overall imports to 54%, up from 48% in December 2023.
Despite the rise in Middle East imports, OPEC’s share in India’s intake in January reached approximately 54%, though this figure remains at its lowest on a financial-year basis. An official from an Indian refiner confirmed that some cargoes scheduled for December were delayed until January.
Moreover, Indian buyers faced additional charges as sellers invoked a force majeure clause due to increased freight and insurance costs following the Red Sea crisis. Although long-haul crude cargoes, predominantly from the Americas, are typically purchased on a delivered basis, the source noted that Indian buyers incurred extra expenses.
In January, India’s imports of Russian oil rebounded from December, reaching 1.47 million bpd, indicating a growth of 10.8%. However, Russia’s share of the total declined slightly to 28% from 30%, while the share of Latin American imports increased to about 8% from 6%, as per the data.
