Indian refiners processed nearly 1.3% more crude oil in May than a year earlier, provisional government data published on Friday showed, while the share of Russian supplies in imports to the world’s third biggest oil consumer increased.

Refinery throughput in May rose to 5.44 million barrels per day (23.03 million tonnes), also up 6.5% month-on-month.

“With India buying larger quantities of Russian crude, some of the refined products are exported to Europe, supporting processing runs,” UBS analyst Giovanni Staunovo said.

Rising Indian demand, supported by solid economic and population growth, is also supporting runs, he added.

The share of Russian oil in India’s oil imports in May rose to 41%, tanker data showed, while imports rose 6.7% year-on-year to 21.75 million metric tons, according to preliminary official data.

India’s fuel consumption in May totalled 20.49 million metric tons (4.84 million barrels per day), higher that the previous month’s consumption of 19.86 million tons but slightly below the 20.69 million tons seen in May 2023.

The month-on-month rise came as strong industrial activity and general elections boosted fuel demand in Asia’s third-largest economy.

India’s industrial output grew at a better-than-expected 5% year-on-year in April, while the economy grew by 7.8% in the first three months of this year.

Natural gas output jumped 6.7% year-on-year to 3.10 billion cubic metres, while crude oil production fell 1.2% to 2.47 million tons, the data showed.

“Indian oil production is likely to see a modest uptick near-term supported by new oil projects, but generally lack of sufficient investments is likely to see Indian production trending lower over the coming year,” Staunovo added.

Hindustan Petroleum Corp plans to start up its 180,000 barrel per day Barmer refinery in India’s desert state of Rajasthan by end-December using mostly Middle East oil.
Source: Reuters (Reporting by Daksh Grover in Bengaluru; Additional reporting by Harshit Verma; Editing by Shailesh Kuber and Jan Harvey)