Team Blitz India
NEW DELHI: India’s crude oil imports from the United Arab Emirates (UAE) have increased sharply in the recent months as the country has turned to the kingdom amid lower Russian discounts and production cuts. The imports are expected to further surge in the upcoming months following discussions between the two countries on the sidelines of the COP28 summit which was held in Dubai recently.
In November alone, India imported 303,000 barrels per day of crude oil from the UAE which was an increase of 35.26 per cent from the previous year, as per the data made available by energy cargo tracker Vortexa. The data also suggests that India’s crude imports from the UAE in October increased 61 per cent over September.
The sudden increase in oil imports from the UAE comes as Indian refiners are facing payment-related issues on buying oil from Russia. The European Union (EU) and the US had imposed an array of sanctions on Moscow after its invasion of Ukraine in February 2022.
Following the sanctions, Russia diverted its oil to Asian countries, especially India and China, at discounted rates. It then became a major source of crude oil for India and eventually overtook the traditional middle-eastern suppliers.
But declining discounts from Moscow and increasing stringency of import norms has led to reversal of the trend now. The United States is enforcing tougher surveillance of fleets of shipping companies involved in transport of Russian oil to India and other similar markets which are within Russia’s reach. Due to this, it has become difficult for Indian refineries to procure crude oil from Russia.
It is back to traditional Middle-East suppliers for India now and among them UAE is the most favourite as it is one of the few countries which has kept its output high among the Organisation of Petroleum Exporting Countries (OPEC).
Recently, OPEC and its allies, the OPEC+ countries, had decided to enforce a newer production cut of one million barrels per day by early 2024 to support better crude prices.