India's oil market has faced an unprecedented collapse. In June, imports of crude oil into the country hit the lowest level in the last nine years. Maintenance turnarounds at the country’s refineries, as well as weaker fuel demand were the key reasons for the decline.
India is the world’s third-biggest oil consumer and importer. However, according to Indian statistical agencies, the country received up to 3.2 million barrels per day of oil in June, which was a significant fall. Thus, oil imports dropped by 0.4% compared to the crisis spring period. Apart from that, the reading plunged by 28.5% from a year ago.
In addition, India changed the list of its main oil vendors. The country’s authorities had to cut oil shipments from Latin America and to halt imports from Venezuela. The lion’s share of oil came to India from the Middle East reaching a seven month high of 67.12% in June.
India has substituted its oil suppliers before. Thus, Iraq replaced Saudi Arabia as the top oil supplier and became the number one oil exporter. The UAE and Nigeria retained third and fourth place, while the United State was only in fifth place.
The general decrease in demand for crude oil in India at the beginning of summer is an annual phenomenon. Usually, the monsoon season is to blame. However, this year, there were also maintenance turnarounds at the country's refineries. All these factors contributed to a significant reduction in oil imports, which, according to experts, would be able to rapidly recover as early as next autumn.
