India’s quest for cheap oil: Middle East’s loss is Africa’s gain

The world’s third largest crude oil importer, India, has increased import of crude oil from Nigeria.

Oil
India shipped in about 3.95 million barrels per day (bpd) of oil in August, the data showed | Representative Photo: iStock

Nigeria emerged as the fourth largest crude oil supplier to India in the month of August – a jump of four places from July. Overall, India’s oil imports from Africa jumped to a 10-month high as refiners look for alternative to expensive crude from the Middle East.

India, which is the world’s third biggest oil importer, shipped in about 3.95 million barrels per day (bpd) of oil in August, the highest volume since April, whereas African nations accounted for about 17.5%, or an eleven month high of 688,000 bpd, the data showed.

“Spot prices of west African oil versus Brent were down in the most part of July compared with June. That along with lower freight offered an opportunity to buy Nigerian oil,” Ehsan Ul Haq, analyst with Refinitiv, told Reuters.

Haq said that Nigeria, eager to increase revenue, supplied more oil in July than it had pledged under a production cut agreement between OPEC and its allies. Along with Iraq, Nigeria was the least compliant country of the rules of export over the May-July period, an OPEC report stated. Angola, on the other hand, was scouting for a new market after the Chinese cut purchases.

India  – the third largest importer of oil in world – emerged as the natural choice to do business for the African nations.

Saudi Arabia, the second highest supplier to India, had increased selling price of crude oil, which brought India closer to African nations eager to sell oil the world over.

Related news: India’s state refiners stop oil imports from Chinese firms

Venezuela too resumed oil export to India in August after a gap of two months as Reliance Industries RELI.NS obtained permission from the U.S. to swap diesel for oil.

The share of Middle Eastern oil shrank to 62.4%, the lowest in three months, from 71.3% last month, while that of Latin America rose to 9.7% from 6.3%.

In the month of August, Iraq was the top oil supplier to India followed by Saudi Arabia and United Arab Emirates. Nigeria, which was the 8th largest supplier in July, rose to No.4, pushing the U.S. to fifth position. Kuwait stayed at No. 6 while Venezuela, replaced Colombia, as the seventh top supplier.

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