Iraq has overtaken Saudi Arabia to become India’s top crude oil supplier by supplying 38.9 million tonnes (MT) crude oil in the current financial year. It was fifth of the India’s essential oil needs.
Saudi Arabia traditionally has been India’s top oil source but in the April-January period of 2017-18, Iraq dethroned it, offering 38.9 million tonnes (MT) of oil.
India imported 184.4 MT of crude oil during the period as compared to 213.9 MT in the entire 2016-17 fiscal, and 202.8 MT in 2015-16.
Despite India cutting imports over delays in award of contract for a gas field development, Iran continued to be the third largest supplier selling 18.4 MT during April-January.
This is the second year in a row that Iran has occupied the 3rd position. Iran was India’s second biggest supplier of crude essential oil after Saudi Arabia till 2010-11 but western sanctions over its suspected nuclear programme relegated it to the 7th spot in the subsequent years.
Within a written answer a question in the Lok Sabha, Pradhan stated Saudi Arabia provided 21.9 MT of crude oil in the first seven months of 2017-18.
For the second year in a row, Iran continues to be the third largest supplier to India by selling 12.5 MT oil through the period.
Iran was India’s second biggest provider of crude oil after Saudi Arabia till 2010-11 but american sanctions over its suspected nuclear program relegated it to the 7th place in the next years. In 2013-14 and 2014-15, India bought 11 MT and 10.95 MT respectively from it.
Sourcing from Iran increased to 12.7 MT in 2015-16, offering it the sixth spot. In the following season, the Iranian supplies jumped to 27.2 MT to catapult it to the 3rd place.
Venezuela is India’s fourth largest supplier with 11.5 MT during the period, followed by Nigerial with 10.6 MT.
India is 80 per cent dependent on imports to meet its essential oil needs. Easing of traditional western sanctions in 2015 has led to the Indian refiners raising their purchase from Iran.
Kuwait, which was the third largest provider in 2013-14 has steadily slipped, supplying just 6.4 MT in the first seven a few months of the existing fiscal. It had in 2014-15 supplied 17.9 MT crude, which emerged down to 9.8 MT in 2016-17.
Imports from Iraq: A great Deal
Iraq was able dethrone Saudi Arabia as India’s largest crude oil supplier mainly by supplying heavily discounted crude compared to crude essential oil sold by Saudi Arabia at Formal Selling Price of OPEC. In given time period, prices of crude oil acquired raised pursuing production cuts by OPEC people. However, Iraq did not followed the aggressive pricing due to its heavy dependence on essential oil revenues to fund its economy. Moreover, Indian refiners in recent years have invested heavily in modernising plants to more efficiently process low grade crudes including Basra heavy crude from Iraq, giving greater flexibility in the cost-saving oil grades they can buy.
Iraq’s economy is dominated by the oil sector, which has provided about 95% of foreign exchange earnings in modern times. most of Iraq’s manufacturing activity has been closely connected to the oil industry.Iraq’s recent contracts with major essential oil companies have the potential to greatly expand oil revenues, but Iraq will need to upgrade its essential oil handling, pipeline, and export infrastructure to enable these deals to reach their potential.