Venezuela becomes India’s third-largest crude supplier in May amid shifting imports

Venezuela has surged to become India's third-largest crude oil supplier this May, surpassing Saudi Arabia and the US. Indian refiners are boosting purchases of cheaper Venezuelan heavy crude due to its attractive economics and compatibility with complex refineries. This shift comes as West Asia conflict disrupts traditional shipping routes, prompting India to diversify its oil sourcing.

New Delhi: Venezuela has emerged as India’s third-largest crude oil supplier so far in May, overtaking heavy weights Saudi Arabia and the US, and trailing only Russia and the United Arab Emirates, as Reliance Industries and other refiners stepped up purchases of its cheaper, heavier grades.The South American country has supplied 417,000 barrels per day(bpd) to India so far this month, up from 283,000 bpd in April and zero supplies in the previous nine months, according to energy cargo tracker Kpler. Supplies from Venezuela resumed last month after the US eased curbs on its exports, weeks after capturing its president, Nicholas Maduro, in January.Also read: OPEC+ leaders expected to up July oil output target despite Hormuz disruption, sources say131251072India’s overall crude imports have increased 8% month-on-month to 4.9 million barrels per day (mbd) so far in May, as per Kpler. However, supplies remain 5% below the import level of 5.2 mbd recorded in February. That was before the Iran war disrupted shipments from West Asia.“Indian buyers have historicallyshown strong interest in Venezuelanbarrels due to their attractive economics and compatibility with complexrefining systems,” said Nikhil Dubey,lead analyst-refining at Kpler.Venezuelan crude is particularly suited to Reliance Industries’ advanced refinery in Gujarat, whilemost other Indian refiners can process this high-sulphur, heavy grade only in limited quantities.Also read: Bulk buyers shifting to retail pumps behind fuel demand spike in parts of IndiaThe easing of US sanctions on Iran had helped India resume crude imports from the West Asian country in April after a gap of seven years. But those supplies have now halted, with no Iranian cargoes received this month due to the US naval blockade of Iranian ports.However, some supplies from Iraq managed to reach India this month after the near closure of the Strait of Hormuz dried up shipments in April. India has received 51,000 bpd from Iraq so far in May, compared with 969,000 bpd in February.Supplies from Saudi Arabia, India’s third-largest supplier before the Iran war broke out on February 28, have, however, nearly halved to 340,000 bpd this month from 670,000 bpd in April. This happened “primarily due to the aggressive pricing of Saudi barrels,” said Dubey of Kpler.