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OPEC’s share of crude imports in India dropped last year to the lowest in at least 15 years, as the world’s third-largest oil importer bought more crude from North America to offset the inability to buy from Iran and Venezuela, Reuters has estimated, based on data obtained from industry sources.
OPEC continued to hold the largest share of India’s oil imports, but that share fell to 70 percent last year. To compare, back in 2008, India’s crude oil imports from the organization’s producers stood at 87 percent.
India has been trying to diversify its oil imports for years, considering high import dependence on OPEC as a geopolitical risk. The country had to stop purchases from OPEC members Iran and Venezuela over the past two years because of the U.S. sanctions. Indian refiners chose to abide by the sanctions regime and not give the United States reasons for possible secondary sanctions or for cutting off Indian companies from the U.S. financial system and markets.
The lack of crude from Venezuela and Iran was one of the reasons why OPEC’s share of Indian oil imports fell last year to the lowest at least since 2007. The other was Indian refiners opportunistically importing more crude from the United States and Canada when arbitrage allowed and prices were favorable.
India is one of the most price-sensitive large importers of oil, and last year it repeatedly called on OPEC and OPEC+ to increase production more than planned in order to bring international crude oil prices down.
Early last year, India called on the OPEC+ group to boost production, saying that it does not support “artificial cuts to keep the price going up.”
As oil prices rallied at the beginning of 2021, India started to call on OPEC+ as early as January to consider the effects of higher oil prices on consumption in recovering economies.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.