Energy imports from West Asia at highest level since onset of conflict

NEW DELHI: India’s energy imports from West Asia rebounded in Sept to the highest level since the US-Iran conflict broke out in the last week of Feb, as supplies through the Strait of Hormuz improved.Data from maritime intelligence and research firm Kpler shows that India got over 60% of its LPG, 47% of its LNG and nearly 40% of its crude from West Asian countries such as the UAE, Qatar, Saudi Arabia, Kuwait and Iran during the month. The West Asian contribution to LPG and LNG supplies averaged 29% between April and Aug, while its share of crude imports averaged 25%.Though Russian Urals volumes shrank during the month, they continued to top India’s crude import basket.According to Kpler, India has imported nearly 1.4 million tonnes (MT) of LPG so far in Sept, with supplies from the UAE accounting for 0.5 MT, up from 0.2 MT in Aug and 0.1 MT in July. The US, which was the largest supplier of cooking and heating gas to India when West Asian cargo were in short supply at the peak of the conflict, saw its supplies fall from 0.8 MT in Aug to 0.3 MT in Sept. Qatar (0.1 MT) and Kuwait (0.1 MT) were the other major LPG suppliers in Sept.Ciaran Tyler, senior manager at Kpler, said businesses catering to the Indian market imported more LPG from West Asia, partially displacing US-origin cargo in Sept. The shorter route also made these supplies more economical amid high freight costs. “Higher imports are often required if stocks are low ahead of the fourth quarter of the year, with LPG demand seasonally rising in India amid the festive season and increased energy requirements as temperatures in northern states cool,” he said.After reaching record levels of 2.7 million barrels per day (mbd) and 2.8 mbd in June and July, respectively -- accounting for nearly 55% of total Indian imports -- Russian crude imports fell to 2.1 mbd in Aug and further to 1.9 mbd in Sept. Supplies from West Asian oil-producing countries such as Saudi Arabia (10%), Iraq (10%), the UAE (9%) and Kuwait (6%) rose. While Russia accounted for 35% of the 5.4 mbd of supplies, West Asian countries accounted for nearly 40% of total imports.“In Sept, West Asian crude increased its share in India’s import basket, as higher STS (ship-to-ship transfer) activity helped move more Gulf barrels through the Strait of Hormuz, allowing refiners to secure higher term allocations,” said Nikhil Dubey, lead analyst at Kpler. He added that Russian crude imports eased from recent highs due to stronger Chinese buying and disruptions to Black Sea flows following drone strikes, which tightened the pool of available barrels.Dubey said improved availability of West Asian crude could give Indian refiners more flexibility to diversify away from Russian barrels, particularly against an evolving geopolitical backdrop that could influence sourcing decisions.“As a result, the balance of India’s crude imports could tilt further towards ME grades if Gulf supply continues to improve,” he said.India imported 2.1 MT of LNG in Sept, the lowest since April. After supplying nearly a third of India’s LNG imports in July and Aug, the US’ share fell to about 16%, or 0.3 MT, in Sept. India received higher volumes of LNG from Oman (0.6 MT) and the UAE (0.3 MT) than in the last few months.You use AI every day. Now get your AI Quotient. Take the AIQ test.