with agency report
15 November 2018, Sweetcrude, Lagos — India’s crude oil imports from Africa more than doubled to 874,000 barrels per day, bpd in October, data obtained from Reuters quoting tanker arrival data from industry sources has shown.
The country’s oil imports in October rose to their highest level since August 2015.
The report cited a fall in Brent’s premium to Dubai swaps which made African crude more attractive, as a reason for the surge in the purchase by India, as its overall imports in October rose 14.1 percent from a year earlier to 4.7 million bpd.
India’s 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.
Brent-Dubai Exchange of Futures for Swaps (EFS) DUB-EFS-1M, 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.
Washington earlier this month granted a waiver to India from sanctions against Iran after New Delhi agreed to cut imports from Tehran.
However, 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.
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, according to the report.