(Reuters) – India’s crude oil imports fell for the second straight month in July in line with lower consumption due to monsoon rains and lower shipments from Russia and Saudi Arabia as prices rose following recent supply cuts from the two oil producers.
Crude imports dropped 1.2% month-on-month to 19.32 million metric tons in July, data from the website of the Petroleum Planning and Analysis Cell (PPAC) showed on Tuesday. Imports were also down 6.3% year-on-year.
Oil product imports fell 4.8% to 3.56 million tons from July last year.
“It is a result of lower consumption during the monsoon season, while refinery turnarounds also impacted oil flows,” said Refinitiv analyst Ehsan Ul Haq.
India’s fuel consumption, a proxy for oil demand, slipped to a 10-month low in July, as monsoon rains restricted mobility.
“Higher oil prices might have slowed down the appetite to buy elevated levels of crude,” UBS analyst Giovanni Staunovo said.
India’s crude oil imports from Russia dipped for the first time in nine months in July, while inbound shipments from Saudi Arabia tumbled to their lowest in 2-1/2 years following OPEC+ cuts, tanker data from trade and industry sources showed.
“Narrowing Russian crude oil discounts also resulted in lower appetite for relatively expensive crude,” said Haq, adding however, “crude oil imports should recover soon after the end of the monsoon season and due to the start of the festival season.”
Earlier this month, the Indian government increased the windfall tax on petroleum crude in an effort to limit private refiners making gains from robust refining margins in overseas markets, instead of selling at home.
The country’s product exports rose 14.3% year on year to 5.36 million tons in July.
(Reporting by Harshit Verma, Brijesh Patel and Ananya Bajpai in Bengaluru; editing by Jonathan Oatis)
