While Gulf countries still dominate India’s crude oil imports, new countries have now entered the top 10 source countries. For the year 2021-22, the USA is at 4e & Russia is at 9e position in the list of countries from which India imports the most crude. Iran and Venezuela have lost their position as major crude exporters to India.
India is the world’s third largest oil consumer, just behind the United States and China. India’s consumption accounts for about 5% of global consumption. However, domestic production represents less than 1% of world oil production. India bridges this gap between demand and supply through imports. India ranks just after China as the world’s second largest importer of crude oil. Crude oil constitutes a major share of India’s total imports with about 1/5e of the total value of imports.
According to preliminary data provided by Petroleum Planning & Analysis Cell (PPAC), India’s dependency on oil imports for 2021-22 was around 85.5%. This is a slight increase from the previous year when 84.4% of its crude oil requirements were met by imports. India is therefore overly dependent on the import of crude oil from other countries to meet its domestic demand. India imports its crude oil from several countries and therefore international trends, diplomatic relations with these countries, etc., have an impact on the imports.
Where does India import crude oil from? What are the trends of recent years? Here is an analysis.
Methodology: Data available from the Ministry of Commerce Export and import database (EIDB) is taken into account for the story. Different oil and petroleum products are listed under various HS (Harmonized Commodity Description and Coding System) codes. We considered imports under HS code 2709, i.e. “Petroleum oils and oils obtained from bituminous minerals, crude”, hereafter referred to as “Crude oil” for this story.
Crude share of total import value almost back to pre-pandemic levels
According to data available on EIDB, India imported crude oil worth USD 122.45 billion in 2021-22. That’s more than double the value of imports during the 2020-21 pandemic, when the value of crude oil imports fell to $59.48 billion. The share of crude oil in overall imports also increased to almost 20% in 2021-22, from 15.1% in 2020-21. In 2019-20, the share was 21.6%.
In terms of import value in USD, crude oil import in 2020-21 is the highest since 2014-15. Trends over the 10-year period (2012-13 to 2021-22) indicate a decline in the value of imports in 2015-16 and the following year before recovering later. This can be corroborated by the information available from the PPAC. However, there is no reduction in the number of petroleum products (including crude) imported during these years. The decline in value reflects the drop in crude oil prices on the international market during the period.
In terms of the number of petroleum products imported, cMYP data indicates a year-over-year increase in the volume of petroleum products, except for 2020-21. The amount of petroleum products imported increased in 2021-22, but remains below a pre-pandemic year.
In 2021-2022, 53.5% of crude oil imports come from Iraq, Saudi Arabia and the United Arab Emirates
India imports crude oil from around 50 countries. However, there is a significant gap in import volumes from each of these countries, with a large share of crude oil imports coming from a few selected countries.
Over the past 10 years, there have been changes in the countries from which India mainly imports crude oil. While few countries have become the main source in recent years, imports from a few of the traditional countries have declined.
While Middle Eastern countries hold the bulk of crude oil imports into India, there has been a gradual decline in the value of imports from African countries. Here’s a look at some key trends over the years.
- Iraq, Saudi Arabia and the United Arab Emirates are the major sources of crude oil imports for India. Iraq has become the top exporter of crude oil to India in recent years, replacing Saudi Arabia. Each of these two countries has retained the top position in each of the 10 years (2012-13 to 2021-22).
- The United Arab Emirates has become the third largest exporter of crude oil to India over the past four years. It was previously among the top 5 countries. During this period, Kuwait lost its position among the top 3 sources of imports, but it is still among the top 10 countries.
- During the first years of the analyzed period, the Latin American country of Venezuela was among the main exporters of crude oil to India, whose position has fallen in the last two years after the pandemic. Similarly, imports from Colombia have also decreased. Meanwhile, Mexico has become one of the leading exporters of crude oil among Latin American countries.
- Among African countries, while Nigeria continues to be one of the top exporters to India, the share of imports from Angola has declined in recent years.
- Iran was among the top 3 countries from which India imported crude oil till 2018-2019. India stopped importing crude from Iran in mid-2019 after the United States imposed sanctions on Iran.
- In recent years, new countries have emerged as the source of crude oil imports, with the United States being the main source. The period of emergence of the United States among the main crude oil importing countries coincides with the reduction of Indian imports of crude oil from Iran. In 2021-22, the United States is the fourth largest exporter of crude oil to India. The United States along with the top three countries of Iraq, Saudi Arabia and the United Arab Emirates account for 63% of the total value of crude oil imports to India.
- The year 2021-22 has seen the emergence of Russia and Brazil among the top 10 countries from which India imports crude oil.
The COVID-19 pandemic in 2020-21 appears to have allowed new countries to emerge in crude oil imports while impacting a few of the traditional sources. It remains to be seen whether imports from countries such as the USA, Russia, etc. would consolidate their position in the years to come to the detriment of others. With the Russian-Ukrainian war continuing and Russia offering deep discounts, the volume of crude imports from Russia will be closely watched. Despite these changes, the Gulf countries remain India’s main source of crude oil imports.
Apart from crude oil, India also imports petroleum products derived from non-crude products i.e. refined products. These are classified under HS code 2710. Even then, Middle Eastern countries hold the bulk. Apart from these countries, South Korea has been a major exporter of refined petroleum products to India.
India mainly exports “petroleum products” to a few countries in Southeast Asia and European countries
According to EIDB data, India does not export crude oil i.e. products under HSC 2709. However, it does export refined petroleum products which come under HSC 2710. These include Motor Spirit (Gasoline), Diesel, Kerosene, Naphtha, etc. .among others. These products are processed domestically from crude oil and exported.
In 2021-2022, Indian exports of these petroleum products amounted to USD 66 billion. It is not only higher than the 2020-21 pandemic, but also higher than the value of exports before the pandemic. This could be due to the high price of crude on the international market.
For 2021-2022, Singapore is India’s largest importer with petroleum products worth USD 6.1 billion. The United Arab Emirates and the Netherlands are the other countries to which India exports a significant share of petroleum products. As was the case with imports, there has also been an increase in the export of petroleum products to the United States in recent years.
Apart from Singapore, Indonesia and Malaysia are other Southeast Asian countries to which India exports. China and Korea are the other countries.
The featured image: India Crude Oil Import Sources