India's crude imports rebound as refiners diversify sourcing amid Gulf disruptions: HSBC
New Delhi, June 30
India's crude oil imports have largely recovered to pre-conflict levels despite months of disruptions in the Middle East, with refiners successfully diversifying supplies by increasing purchases from Russia, the United States, Oman, West Africa and South America, according to an HSBC Global Research report.
The report says Indian refiners have adapted quickly to the supply disruptions caused by the Strait of Hormuz crisis by sourcing crude from alternative producers instead of relying heavily on Gulf supplies.
"After a dip in March, Indian crude imports have broadly returned to pre-conflict levels as refiners replaced Middle East supplies with alternatives from Russia, the US, Oman, West Africa and South America," the report said.
According to HSBC, Russia continues to remain an attractive supplier for Indian refiners as its crude is competitively priced. "Russian oil is trading at a small discount to Brent, making it attractive to Indian refiners." The report adds that Russian export availability has improved after Ukrainian attacks on Russian refineries curtailed domestic processing, allowing more crude to reach export markets.
While Gulf oil exports are recovering following the reopening of the Strait of Hormuz, HSBC does not expect Asian refiners, including those in India, to significantly increase purchases from the region in the near term. The report notes that refiners across Asia have already secured cargoes for July and August and are entering scheduled maintenance periods, limiting immediate demand for additional spot cargoes.
The report also points to India's cautious approach towards Iranian crude despite a temporary easing of US sanctions. "Indian refiners are cautious about buying from Iran unless US sanctions waivers are extended beyond August."
HSBC believes the reopening of the Strait of Hormuz has created a temporary oversupply of Middle Eastern crude in global markets as stranded cargoes are being released faster than refiners can absorb them. However, it expects this "mini-glut" to fade over the coming weeks as inventories are rebuilt and strategic petroleum reserve releases come to an end.
The report suggests that diversified sourcing has helped India maintain crude supplies without significant disruption, reducing dependence on Gulf producers during the crisis. The country's ability to quickly switch to discounted Russian barrels and other Atlantic Basin supplies has enabled refiners to keep imports steady while avoiding exposure to supply uncertainties in the Middle East. As Gulf markets stabilise, India is expected to continue balancing imports across multiple suppliers based on price competitiveness and geopolitical risks.
— ANI
Reader Comments
Interesting how quickly India pivoted. The report mentions Russian oil is trading at a discount - that's pragmatic economics. But I'm concerned about the temporary "mini-glut" of Middle Eastern crude the report mentions. Hope our refiners don't get caught with overpriced contracts when markets normalize.
Good to see Indian refiners being strategic. But I do wish we were more ambitious with renewable energy. Every time there's a Gulf crisis, we dance this same song and dance of diversifying oil sources. Solar and wind should be our real long-term strategy. Still, kudos for managing the crisis well.
This is why India needs to keep strengthening ties with multiple regions. The West Africa and South America connections are smart. Also glad to see we're not rushing back into Iranian crude without proper sanctions clarity. Prudent approach! 🙌
The report's point about Russian refineries being damaged by Ukrainian attacks actually increasing export availability is ironic. But from India's perspective, it's good we capitalized on that. The "mini-glut" the report mentions should help keep prices reasonable for consumers in the short term.
Smart diversification but I wonder about the strategic petroleum reserves. The report mentions reserve releases ending - are we refilling them adequately? Last year's crisis showed we need robust buffer stocks. Hope our petroleum ministry is thinking about that beyond just monthly import numbers.
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