India’s crude oil imports fell to a seven-month low in June, with shipments into the world’s third-biggest oil importer dropping in line with lower consumption due to monsoon rains and refineries undergoing maintenance.

Crude imports dropped 6% month-on-month in June to 19.18 million metric tons, data from the website of the Petroleum Planning and Analysis Cell (PPAC) showed on Tuesday.

Meanwhile, oil products imports rose 14% to 3.61 million metric tons from June last year.

“The decline in imports is mostly driven by lower refining, as the Bina and the Visakhapatnam refineries have at last gone into maintenance from early July,” said Viktor Katona, lead crude analyst at Kpler, adding that the monsoon is the reason refineries are going into maintenance.

India’s fuel consumption, a proxy for oil demand, eased in June as monsoon rains restricted mobility in the country.

Data obtained from trade sources showed that India’s Reliance Industries’ RELI.NS, operator of the world’s biggest refining complex, Russian oil imports in June fell 2.4% month-on-month.

“Saudi Arabia’s voluntary cuts and Russian supply reductions are also leading to lower supply of crude oil,” said Refinitiv analyst Ehsan Ul Haq.

“However, Indian oil demand is likely to pick up after the monsoon season. The festival season could see another jump in demand, which should lead to more crude oil imports.”

The country’s product exports fell to 5.01 million metric tons, with diesel accounting for 1.95 million metric tons compared with 2.38 million metric tons in May.

“While the diesel export duty is still kept at zero, incentivizing exports of middle distillates, it seems that India’s export capacity has reached its upper limit,” Katona added.
Source: Reuters (Reporting by Ananya Bajpai, Arpan Daniel Varghese and Brijesh Patel in Bengaluru; editing by Jonathan Oatis)