In November, India experienced a significant shift in its fuel trade dynamics, witnessing a surge in fuel exports while facing a decline in fuel imports, according to data released by the country’s oil ministry. This shift was primarily influenced by increased refinery activity and altered demand patterns during the Diwali festival season.
Fuel Export Surge:
Month-on-Month Rise: India’s fuel exports soared in November, reaching 5.64 million tons, a substantial increase from the 4.47 million tons recorded in October.
April-November Performance: Notably, these November exports stood as the second-highest volumes for India in the April-November period, surpassed only by the figures from August.
Refinery Contribution: The escalated fuel export figures were partially attributed to heightened processing rates at domestic refineries. This amplification in production capability enabled India to boost its outbound shipments.
EU Shipment Surge: India also witnessed a surge in shipments to the European Union, a trend that gained momentum in recent months following the EU’s embargo on seaborne imports of Russian petroleum products starting February 2023.
Fuel Import Decline:
November Import Figures: Contrary to the surge in exports, fuel imports into India dwindled to 4.15 million tons in November from 4.43 million tons in October.
Year-on-Year Comparison: Although witnessing a decline from the previous month, the November 2022 import figures still stood 3% higher than those recorded in November 2022, marking a relatively steady trajectory.
Crude Oil Import Scenario: Crude oil imports experienced a marginal dip of 0.9% in November compared to October.
Russia’s Role in India’s Fuel Trade:
Russian Oil Dynamics: India, ranked as the world’s third-largest crude oil importer, emerged as a significant consumer of Russian oil following the EU’s ban on Russian crude imports in December 2022.
Russian Export Statistics: Russian Deputy Prime Minister Alexander Novak revealed that China consumed half of Russia’s exported crude this year, with India closely following suit.
India’s Import Evolution: India’s share of Russian oil imports experienced a substantial upsurge, growing from virtually none in prior years to now standing as Russia’s leading supplier.
Shifting Global Trade Dynamics:
EU’s Changing Market Share: Novak highlighted a significant shift in Russia’s export destination preferences. Historically, around 40-45% of their crude oil and refined products were directed to Europe. However, by the year-end, this share was anticipated to plummet drastically to 4-5%.
China and India’s Relevance: China and India have now emerged as pivotal markets for Russian oil and fuel exports, accounting for approximately 45-50% and 40% respectively, marking a dramatic shift in global oil trade dynamics.
The evolving landscape of global fuel trade, influenced by geopolitical changes and shifting market preferences, has seen India solidifying its position as a key player in the fuel import-export market, particularly in its burgeoning relationship with Russia amid changing global trade dynamics.