India’s Crude Oil Imports Rise in December on Strong Demand

India's Crude Oil Imports Rise in December on Strong Demand

VoM News Desk | January 30, 2024 | 12:16 AM IST | Breaking News | Follow on Google News

India’s Crude Oil Imports Rise in December on Strong Demand

India’s Crude Oil Imports Rise in December on Strong Demand

India’s crude oil imports witnessed a 1.1% year-on-year increase in December, reaching 19.83 million metric tons, as reported by the Petroleum Planning and Analysis Cell (PPAC). The data also indicated a 7.4% monthly growth. This surge aligns with a general economic pickup, contributing to the rise in imports, according to Prashant Vasisht, Vice President and Co-head of Corporate Ratings at ICRA. Lower crude prices and growing Indian oil demand were cited as factors supporting the increased imports. Additionally, diesel exports experienced a notable 18% jump, potentially influenced by the European Union’s bans on Russian oil imports due to the conflict in Ukraine.

Crude Prices and Geopolitical Factors Impacting Imports

In 2023, crude futures faced a volatile year, losing over 10%, marked by geopolitical turmoil and concerns about major oil producers’ output levels. The decrease in crude prices, combined with India’s strong demand, contributed to the rise in imports. Giovanni Staunovo, Analyst at UBS, highlighted the noteworthy trend of increased diesel exports, potentially directed towards Europe amid the EU’s restrictions on Russian oil.

Supply Chain Concerns Amid Red Sea Crisis

While the Red Sea crisis has not significantly impacted India’s crude supply routes, concerns about potential disruptions linger. Hindustan Petroleum Corp Ltd expressed confidence in ongoing supply but acknowledged the need for vigilance if the situation escalates. The diversion of vessels from the Red Sea to longer routes due to Yemen’s Houthi group attacks has led to a 350% rise in shipping costs from Asia to Europe, highlighting broader challenges in the global supply chain.

VoM News Desk

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