India's crude imports hit 10-month peak as refiners bank on strong demand

(Reuters) -India’s crude oil imports in November rose to their highest level in 10 months as refiners stocked up to boost runs in anticipation of strong demand in the world’s third-largest oil consumer and importer.

FILE PHOTO: An oil refinery of Essar Oil , which runs India's second biggest private sector refinery, is pictured in Vadinar in the western state of Gujarat, India, October 4, 2016. REUTERS/Amit Dave/File Photo

Crude oil imports last month rose 7.5% versus October and were also 0.5% higher than a year ago at 18.37 million tonnes, data on the website of the Petroleum Planning and Analysis Cell (PPAC) showed on Thursday.

The relatively high imports corresponded with the country’s crude processing hitting its highest level since February 2020 during the same month refiners operated at full capacity in hopes of a steady uptick in demand.

“Crude imports have risen as refiners boost their runs in expectation of higher demand in the fourth quarter,” said Refinitiv analyst Ehsan Ul Haq.

“It remains to be seen if floods in the south of India and Omicron lead to slower demand recovery. It also depends on oil prices. If prices remain at present levels or fall, demand will continue to recover,” Haq said.

The share of Middle Eastern oil in India’s overall crude imports rebounded to a 16-month high in November as refiners shunned costly Brent-linked long haul grades.

India’s Reliance Industries, owner of the world’s biggest refining complex, imported 6% more oil in November than a year earlier at about 1.24 million barrels per day (bpd), according to data from shipping and industry sources.

Meanwhile, India’s fuel consumption fell last month after scaling a seven-month peak in October, as demand eased after the festive season. [O/INDIA2]

Oil product imports dropped 26.6% to 3.49 million tonnes from a year earlier, while exports jumped 26.8%. Of the 5.15 million tonnes of exports in November, diesel accounted for 2.78 million tonnes.

Asia’s third-biggest economy imports and exports refined fuels as it holds surplus refining capacity.

Reporting by Brijesh Patel and Kavya Guduru in BengaluruEditing by Matthew Lewis