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Petroleum export earnings decline as crude prices fall

India, having expanded the export markets for refined petroleum products, saw a steep fall in earnings from petroleum shipments in the April-October period this year due to declining crude oil prices, global economic slowdown, a rise in domestic consumption, and shrinking discounts on Russian oil.

According to data from the government’s Niryat portal, the export value of petroleum products stood at $45.56 billion in April-October 2023, down 17.84% from $55.45 billion in the year-ago period.

Petroleum exports to South America, Africa, South Asia, West Asia-North Africa (WANA) and South-east Asia saw a decline in value terms.

 

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However, earnings from exports to Europe, North America and CIS rose.

The price of Brent crude has declined 3% in the last year.

A commerce ministry spokesperson didn’t respond to emailed queries.

Interestingly, India imports most of its petroleum requirements despite being a key refining hub in Asia, with an annual installed capacity of 250 million tonnes across 23 refineries.

Since early 2022, India’s oil imports have been boosted by sanctions-hit Russia, which sold oil at a discount.

According to Reuters, the share of Russian oil in India’s overall imports rose to about two-fifths during the first half of the current financial year, consolidating Moscow’s position as the top supplier as Indian refiners curbed purchase from the West Asia.

India imported on average 1.76 million barrels per day (bpd) of Russian oil from April to September 2023, more than double the 780,000 bpd in the year-ago period.

However, due to narrowing of discounts by Russian suppliers, India’s import of Russian oil has slowed down.

Data from Kpler and Vortexa showed a 12% and 8% decline in India’s monthly intake of Russian oil in October from the previous month.

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Updated: 28 Nov 2023, 10:59 PM IST

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