India’s January crude oil imports slip from one-year highs

India’s crude oil imports in January slipped from one-year highs hit in the previous month, though fuel demand is expected to recover as several states ease coronavirus restrictions after a decline in cases.

Crude oil imports fell about 1.7% to 19.26 million tonnes last month from a year earlier, government data showed on Friday. Lower imports corresponded with the country’s oil demand falling 0.2% on an annual basis in January.

It’s impossible to ignore the impact of the Omicron variant of coronavirus and that along with high oil prices hampered fuel demand in January, said Craig Erlam, senior market analyst at OANDA.

“The price will continue to be a headwind as far as demand is concerned in the near-term but with the country emerging from another COVID wave, I’d expect to see it continue to recover.”

January crude imports decreased by about 2.6% from the previous month but were 2.9% higher from pre-pandemic levels of December 2019.

The International Energy Agency (IEA) in its monthly report said Indian oil demand is projected to increase by 320,000 barrels per day (bpd) in 2022, which would surpass the 2019 rate by 40,000 bpd, with LPG/ethane, gasoline and naphtha rising the most.

Oil product imports rose 12.4% to 3.43 million tonnes from a year earlier in January, while exports jumped 14.4%.

Refiners in Asia are waiting to resume imports from Iran amid hopes of an agreement to revive Tehran’s 2015 nuclear deal with world powers. A refiner from India, Iran’s No. 2 customer, is in talks with Iran for sourcing its oil, an Indian refining source said.

India’s oil imports from Iraq surged to a 29-month high last month, data from shipping and industry sources showed.

January oil imports of India’s Reliance Industries, owner of the world’s biggest refining complex, jumped about 8.3% from December.