In a shift of dynamics, OPEC is poised to reclaim a larger portion of India’s oil imports in the upcoming years, leveraging the proximity of its supplies, as highlighted by the producer group’s chief in response to Reuters. This anticipated resurgence follows a recent decline in OPEC’s share, attributed to heightened competition from discounted Russian oil.
Industry data indicates that India’s import share of oil from the Organization of the Petroleum Exporting Countries (OPEC) dropped from approximately 65% in 2022 to 50% last year, with New Delhi emerging as a significant purchaser of seaborne Russian crude post Moscow’s incursion into Ukraine.
OPEC’s Secretary General, Haitham Al Ghais, emphasized the need for OPEC members and other producers to adapt to evolving market trends resulting from altered trade flows since early 2022. Al Ghais underscored the strategic advantage of OPEC Middle East producers as ideal suppliers to the Indian market due to their close proximity, offering cost-efficient solutions for all parties involved.
Notably, OPEC contributed 54% of India’s imported oil in January, with projections indicating a further uptick in levels over the coming decades as India’s economic progress unfolds. Al Ghais expressed confidence in OPEC members playing an expanded role in India’s development beyond oil, with numerous national oil companies from OPEC eyeing investments in India’s refining sector.
India, positioned as the world’s third-largest oil importer and consumer, aims to enhance its refining capacity to 9 million barrels per day (bpd) by 2030, up from the current 5.02 million bpd. The International Energy Agency forecasts India to be a primary driver of global oil demand growth through 2030, aligning with OPEC’s expectations of Indian demand surpassing 11.7 million bpd by 2045.