India's African Oil Imports Hit 3-year High

By Nidhi Verma and Florence Tan
Wednesday, November 14, 2018

India's oil imports from Africa in October rose to their highest level since August 2015, after a fall in Brent's premium to Dubai swaps made African crude more attractive, tanker arrival data from industry sources showed.

India's overall imports in October rose 14.1 percent from a year earlier to 4.7 million barrels per day (bpd) with shipments from Africa more than doubling to 874,000 bpd, according to the data.

Indian oil imports typically rise from October due to higher fuel demand in the festival season and as industrial activity picks up after four months of monsoon rains.

Government data released on Tuesday showed that India's fuel demand rose 4 percent in October from a year earlier to five-month high of about 18 million tonnes.

Resumption of operations at some refinery units after maintenance turnaround also pushed up India's oil imports in October.

Analyst said a narrowing price differential between Brent and Dubai linked grades and uncertainties over Iranian supplies was another reason that spurred the purchase of African grades.

"October arrival means orders must be placed in July-August when average premium for Brent-linked lighter grades eased against Dubai crude to turn African grades profitable," Sri Paravaikkarasu, head of East of Suez Oil for consultants FGE in Singapore, said.

Brent-Dubai Exchange of Futures for Swaps (EFS) , an approximation of the premium at which Atlantic basin light-sweet crude trade to Gulf heavy-sour grades, narrowed to about $2.5/ barrel in July and $1.8 in August.

The narrowing of the price spread between the two benchmarks opens the arbitrage for Atlantic Basin crude grades to Asia, while making Dubai-linked grades more expensive for Asian buyers.

Paravaikkarasu said uncertainties over the grant of waiver from the U.S. sanctions against Tehran also pushed refiners to tap spot markets for African grades.

Washington earlier this month granted waiver to India from sanctions against Iran after New Delhi agreed to cut imports from Tehran.

India's oil imports from Iran in October fell by about 12 percent to about 466,000 bpd. The country's overall purchases from Iran in April-October, the first seven months of the current fiscal year, rose 34 percent.

A trade source who handles African oil said Reliance Industries Ltd, operator of the world's biggest refining complex, also increased crude imports from West Africa after restarting its fluid catalytic cracker.

Paravaikkarasu said robust gasoil cracks also helped to drive higher purchase of middle distillate rich African grades.

The share of African oil in India's overall imports almost doubled in October from a tenth in the same month a year earlier while purchases from the Middle East accounted for about 57 percent compared to 69 percent, the data from industry sources showed. The sources declined to be identified as they are not authorised to speak to the media.


(Reporting by Nidhi Verma. Editing by Jane Merriman)

Categories: Tankers Oil Asia Africa

Related Stories

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

MODEC and Terra Drone Renew FPSO Drone Inspection Partnership

Chuditch Gas Field Drilling Ops Get Delayed to Next Year

French Oil Major Acquires Interests in Multiple Blocks in Southeast Asia

Fugro Expands Geotechnical Testing Capabilities in Indonesia

UK Firm Secures Exploration Extension for Two Blocks off Vietnam

TPAO, SOCAR and BP to Ink Caspian Sea Oil and Gas Production Deal

Borr Drilling Bags Three New Assignments for its Jack-Up Drilling Rigs

Current News

PTTEP Hires Velesto’s Jack-Up Rig for Drilling Campaign off Malaysia

Yinson Production Secures $1.17B Refinancing for FPSO Maria Quitéria

Centrica and Thailand’s PTT Ink Long-Term LNG Supply Deal

Petrovietnam, Partners Sign PSC for Block Off Vietnam

Japan Protests China’s New Oil and Gas Construction Activities in East China Sea

CNOOC Signs Hydrocarbons Exploration and Production Deal with Kazakhstan

Thailand's PTT to Buy LNG from Glenfarne's Alaska LNG Project

Woodside and Jera Agree LNG Cargoes Supply for Japan’s Winter Period

Petronas Expands Suriname Portfolio with Deepwater Block Acquisition

Japanese Oil and Gas Firm Enters Two Blocks off Malaysia

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com