India is buying more crude from the Persian Gulf than from Russia in November, for the first time since the Iran war began. Recovering Hormuz flows, shorter shipping distances and weaker appeal of Russian barrels are driving the shift.
India has imported higher volumes of crude oil from the Persian Gulf than from Russia so far in November. It is the first time this has happened since the Iran war disrupted the normal supply chain through the Strait of Hormuz.
Bloomberg, citing Kpler data, estimated Gulf flows at about 2.1 million barrels per day (bpd), against 1.8 million bpd from Russia. Russia remains a key supplier, but the rebound in Hormuz flows and the shorter distance to India have lifted Gulf volumes.
Hormuz flows recover from April low
Before the war, India's total crude imports via Hormuz averaged about 2.8 million bpd. In April, with the Strait closed to almost any traffic, Gulf flows to India fell as low as 247,000 bpd, early in a war now nine months old.
The report calls it another sign that Hormuz flows have materially recovered in recent weeks, thanks to ship-to-ship (STS) transfers that have moved closer to India's coastlines amid congestion in the Gulf of Oman and fears of attacks on tankers near the Strait.
Russian crude loses its price edge
Last month, STS operations outside the Strait became so crowded that they expanded into India's West Coast. The Gulf of Kutch, which opens towards the Arabian Sea, has become another STS point for Gulf producers who want to keep supplies flowing to Asian markets.
At the end of October, state-owned refiner Bharat Petroleum Corporation Limited (BPCL) said it would reduce its Russian crude purchases in November, citing high freight costs and premiums for Russian crude that undermine its appeal against multiple offers of Middle Eastern barrels, whose prices are falling.
Source: Investing.com
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