Kolkata: India has stared exploring new countries to import crude oil from after the US-Iran war and choking of the Strait of Hormuz demonstrated the economy’s
vulnerability to energy chokepoints. New Delhi began exploring new sources to secure its crude oil supply. The government succeeded in adding new countries to import from and began sourcing. However, data so far suggest that old suppliers continue to rule and Russia has maintained its pre-eminent position.
10 new suppliers
Refering to data from Kpler, an energy analytics firm, reports have stated that in the past six months following the outbreak of the war in West Asian crisis, nine of the 10 new suppliers accounted for just 1.4% of India’s crude oil imports. Venezuela was the only exception, accounting for about 5%. Meanwhile, the top five suppliers accounted for 76% of crude imports. The share of the top five countries was 79% in the six months before the war.
Changes in the top five suppliers
The list of top five crude oil suppliers have changed in the past six months. Venezuela and Brazil replaced the US and Nigeria. But Russia, the UAE and Saudi Arabia continue to be the key suppliers. The Herfindahl-Hirschman Index (HHI), which measures supplier concentration, increased by 56% to 2,513 during March-August, from 1,606 in the previous six months. This has taken place despite an increase in the number of suppliers.
According to analysts, a HHI of more than 2,500 indicates high concentration of supply, while HHI of less than 1,500 indicates low concentration. The increase was primarily driven by Russia, whose share in India’s crude imports rose to 47% in the March-August period from 29% in the previous six months.
India bought crude from 31 countries
During the March-August period, India purchased crude oil from as many as 31 countries. This number was 24 in the previous six months. Three long-standing suppliers dropped out of the sourcing mix. Among major suppliers, supply from Iraq declined the most, its share dropping from 18% to just about 2%. The decline of 820,000 barrels per day (bpd) in Iraqi supply was largely offset by an increase of 770,000 bpd in Russian supply, bringing Russian supply to 2.25 million bpd.
Oil imports from Venezuela
Saudi supplies fell by about 300,000 bpd, partially offset by the return of 233,000 bpd of crude from Venezuela and a 50,000 bpd increase in supplies from Angola. US supplies fell by about 200,000 bpd, while higher volumes from Oman and Brazil somewhat offset this. Apart from Venezuela, the share of new suppliers was very low. Iran, Ecuador, the Bahamas, Algeria, the Netherlands, Canada, and other countries supplied crude oil in only one out of six months. With the change of regime in Caracas, Venezuela could become a bigger source of crude for India in the coming years.
