India’s crude oil imports last month dropped to their lowest since October, government data showed on Wednesday, as soaring global prices made it costlier to procure the fossil fuel.

February crude oil imports decreased by about 8.6% from the previous month and were 5.7% lower than pre-pandemic levels of the same month two years ago.

“The headline number being below Feb. 2020 levels suggests that India’s pandemic recovery still has quite some way to run,” said OANDA senior analyst Jeffrey Halley, and attributed the drop in imports from January to the sharp increase in global oil prices.

On a year-on-year basis, however, India’s crude imports rose about 15.4% to 17.59 million tonnes last month from the relatively low figures of February 2021 when demand was slow due to the coronavirus pandemic.

Global crude prices have hit multi-year highs as a high-stakes standoff between Russia and neighbouring Ukraine, which had kept prices elevated, escalated to an invasion late last month, triggering a swathe of Western sanctions on Moscow. O/R

Russia is the world’s top exporter of crude and oil products combined, with exports of around 7 million bpd, or 7% of global supply.

India is the world’s third-biggest oil importer and consumer, and covers over 80% of its crude oil needs with imports, relying heavily on the Middle East.

It is, however, considering taking up a Russian offer to buy its crude oil and other commodities at discounted prices, two Indian officials said this month.

If the two parties can find a way around sanctions and logistics, it should see a massive surge in Indian imports, Halley said.

Oil product imports dipped 1.2% to 3.32 million tonnes from a year earlier, while exports jumped 18.3%. Of the 4.91 million tonnes of exports in February, diesel accounted for 2.41 million tonnes.

India, Asia’s third-biggest economy, holds surplus refining capacity and exports refined fuels as well.
Source: Reuters (Reporting by Bharat Govind Gautam in Bengaluru, Editing by Louise Heavens)