4 hrs ago
India’s Venezuelan Oil Imports Could Reach Seven-Year High
India is expected to receive much more oil from Venezuela in October than it did in September.
One estimate puts shipments at about 465,000 barrels each day.
But some ships may not unload before October ends, so another estimate says the amount actually delivered could be closer to 350,000 barrels a day.
The cargoes are headed to Sikka in Gujarat, which serves a refinery run by Reliance Industries.
Venezuelan oil is attractive because it costs less than Russian Urals oil.
Russia is still India’s biggest oil supplier, but its share of India’s imports has fallen.
Venezuelan oil is heavy and harder to process than some other kinds.
Shipping costs and refinery limits could make it harder for India to keep increasing these purchases.
Kpler data puts October Venezuelan crude shipments to India at about 465,000 barrels per day, more than double September’s roughly 196,000.
Kpler senior manager Sumit Ritolia says actual October deliveries may average closer to 350,000 barrels per day because some ships may not unload by month-end.
All Venezuelan cargoes currently bound for India list Sikka, Gujarat, which serves Reliance Industries’ Jamnagar refinery complex.
Venezuelan Merey crude is discounted against Russian Urals as Indian refiners respond to higher Russian prices and the possibility of fresh US sanctions.
Higher tanker costs and the limited ability of many Indian refineries to process heavy crude could constrain continued growth.
- Who
- Indian refiners, Venezuelan crude suppliers, and Kpler senior manager Sumit Ritolia.
- What
- India’s Venezuelan crude imports are forecast to rise sharply in October and could reach their highest level in nearly seven years, though actual deliveries may be lower.
- Where
- Shipments are bound for Sikka, Gujarat, serving Reliance Industries’ Jamnagar refinery complex.
- When
- October; India resumed Venezuelan oil imports in February after an almost year-long pause.
- Why
- Discounted Venezuelan crude offers an alternative as Russian crude prices rise and Indian refiners reconsider their exposure to potential US sanctions.
Factors supporting higher Venezuelan imports
Factors limiting import growth
Price and diversification
Factors supporting higher Venezuelan imports
Discounted Merey crude offers Indian refiners an alternative as Russian Urals prices rise and refiners become more cautious about Russian purchases.
Factors limiting import growth
The longer voyage and higher transportation costs can partly offset Merey’s price discount.
Refinery capacity
Factors supporting higher Venezuelan imports
Reliance’s Jamnagar complex has capabilities to process challenging crude grades.
Factors limiting import growth
Many Indian refineries have limited ability to process heavy crude continuously or in large proportions.
October volumes
Factors supporting higher Venezuelan imports
Kpler data estimates shipments at about 465,000 barrels per day, more than twice September’s level.
Factors limiting import growth
Ritolia expects actual October deliveries to average closer to 350,000 barrels per day because some vessels may not unload before month-end.
Key facts
- October shipment estimate
- Kpler data estimates about 465,000 barrels per day, compared with approximately 196,000 barrels per day in September.
- Expected delivered volume
- Sumit Ritolia expects October deliveries to average closer to 350,000 barrels per day because some vessels may not discharge by month-end.
- Destination
- All Venezuelan cargoes currently headed for India list Sikka port in Gujarat.
- Refinery served
- Sikka serves Reliance Industries’ Jamnagar refinery complex.
- Russian crude share
- Russia’s share of India’s imports fell to around 35% in September from as high as 56% in July, according to Kpler.
- Merey crude
- Venezuela’s flagship crude is heavy and high-sulfur, and trades at a discount to Russian Urals.
- Constraints
- Higher tanker rates and limited refinery capacity to process heavy crude in large volumes may constrain sustained import growth.
Quotes
Sumit Ritolia
Kpler senior manager
“These barrels are relatively difficult, heavy barrels, and not every Indian refinery can process them continuously or in large proportions.”
businesstoday.in
“Venezuelan crude has become an increasingly important part of India’s diversification since the start of the year.”
businesstoday.in
Sources
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