India is looking to widen its crude import basket with more non-OPEC crudes, but the diversification strategy is unlikely to impact term contracts with Middle Eastern suppliers, as energy security takes center stage, DLN Sastri, director for oil refining and marketing at the Federation of Indian Petroleum Industry, said in an interview.
In addition, expanding strategic reserves and building a fleet of oil tankers will figure in the future oil strategy for India, which imports more than 80% of its crude oil needs, Sastri told Platts, part of S&P Global Commodity Insights.
“The long-term diversification plan won’t alter the majority of the term contracts with Middle Eastern producers. State-refiners will not like term volumes for Middle Eastern crude to fall below 50%,” he added.
Russian imports accounted for about 35% of India’s total crude requirements in 2024, which was nearly 4.9 million b/d. The Middle East and Russia together accounted for nearly 80% of India’s crude imports, according to data from S&P Global Commodities at Sea.
“For India, security of supply is as important as affordability. The configuration of many Indian refiners is being built keeping in mind the crude specifications of Middle Eastern supplies, such as Kuwait and Iraqi crudes,” Sastri added.
He added that India has been buying large volumes of Russian crude since the start of the Russia-Ukraine conflict because of attractive discounts, and this would continue as long as the price remains attractive. “India continues to buy Russian crude, but there is no binding agreement, and it is being driven purely on commercial considerations.”
Russian crude shipments averaged 3.68 million b/d in May, up 165,000 b/d, or 5%, from April levels to the highest since October and above average 2024 flows of 3.54 million b/d, according to CAS data.
Russia’s crude exports to its biggest customers, India and China, were little changed at 1.67 million b/d and 1.11 million b/d, respectively.
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