Daily Energy Report
India’s oil demand, Beijing issues quotas, Iran oil spill, US shale spending, US Gulf wind auction, China’s cheap nuclear, China refiners like Russian crude, EV dreams, Methane detection, and more
Chart for the Day: Was India’s oil demand growth exaggerated?
Figure (1) above shows India’s total oil imports, imports from Russia, and the percentage of oil imports from Russia from total oil imports. The chart shows that India increased its oil imports after the Russian invasion of Ukraine and at one point 50% of oil imports came from Russia. However, this percentage declined to about 36% recently.
EOA’s Main Takeaway
India’s oil demand growth has been exaggerated. Imports were range-bound in the first eight months of 2023.
Imports from Russia declined in recent weeks.
Share of imports from Russia reached 50% but declined to 36% recently. This indicates that the share of other countries increased. We predicted this trend in previous reports when we stated that the decrease in the Russian discount with the increase in prices means that India will import less from Russia. Some people attributed the decline to the price cap. We believe that the decline has nothing to do with the price cap.
The chart above shows India’s oil imports. But looking at Russia’s exports increasing in the last three weeks (has not reached India yet), we see a major decline in India’s oil imports from Russia. However, it may not be a “major decline” because a large amount of Russian oil exports remain without a clear destination and therefore might end up in India.
Story of the Day
China has released new oil product export quotas, allowing oil companies to export surplus barrels. Sinopec Shanghai Petrochemical leads the list of quota holders and plans to boost exports in the second half of the year while ensuring domestic demands are met. Although specifics about the quota volume were not provided, market sources anticipate a 10% increase in exports in September compared to August, amounting to about 3.5 million mt of clean oil products.