Disruptions in crude oil supply due to tensions in the Middle East have caused increases in the prices of gasoline, diesel fuel, liquefied gas, and LNG in India. Nevertheless, energy supply in the country remains stable as India has secured its needs with oil from several other countries after halting imports from the Middle East.
India sources its oil from Russia, Venezuela, and the United States. India's energy strategy has always involved increasing imports from sources where more affordable oil can be obtained. Due to the rise in Russian oil prices, India has increased its purchases of oil from Venezuela. The share of Russian oil in imports has decreased from 56% to 35%.
Bloomberg News reported on Wednesday that crude oil imports from Venezuela to India are expected to double in October. This is because South American producers are incentivized to increase purchases due to significant discounts on their oil, allowing them to counter rising refiner costs and risks associated with sanctions against supplies from Russia.
According to Kepler estimates, in October, India will receive about 465,000 barrels per day (BPD) of oil from Venezuela, compared to 196,000 BPD in September. Assuming timely vessel arrivals, October imports will be the highest since December 2019, although the actual volume may be lower.
Sumit Ritoli, Senior Manager at Kepler, forecasts that the average delivery in October will be around 350,000 barrels per day, as some vessels may not manage to unload cargo by the end of the month. Currently, all vessels heading to India from Venezuela mention the port of Cikka in Gujarat. This port serves the Jamnagar refinery complex of Reliance Industries, which is the world's largest refining center. According to vessel tracking data, at least two tankers are expected to arrive on India's west coast on October 31.
After the US eased restrictions on crude oil exports from Venezuela, India resumed importing Venezuelan oil in February, after nearly a year. Indian refineries are reassessing their dependence on Russian crude oil.
Although Russia remains the largest supplier of crude oil to India, Kepler data shows that Russia's share in India's imports has dropped from 56% in July to approximately 35% in September. Prices for Russian Urals oil have also risen; Baltic Sea crude prices reached their highest level since the start of the war in Ukraine. Furthermore, Indian refiners are exercising greater caution regarding Russian purchases due to the threat of US sanctions and penalties.