India's June crude oil imports lowest in over five years; exports dip

India’s crude oil imports fell in June to their lowest level since February 2015, while year-on-year refined product exports declined for the first time in almost a year, government data showed on Friday.

Crude oil imports last month dropped about 19% from a year earlier to 13.68 million tonnes, down for a third straight month, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.

“This is likely driven by not yet fully recovered oil demand and expectation that it might take longer to have Indian oil demand rising strongly again,” said UBS analyst Giovanni Staunovo.

“Together with higher crude imports at the start of the year, crude tanks are still well filled, reducing the need to import more crude for now.”

(Graphic: India’s June crude oil imports plunge to over 5-year low https://graphics.reuters.com/INDIA-FUEL/IMPORTS/azgpokjddpd/chart.png)

Fuel demand in India, the world’s third-biggest oil importer and consumer, fell 7.8% in June compared with a year earlier as surging coronavirus cases and rising retail prices hammered demand.

“India’s fuel demand recovery will continue to stall as coronavirus cases continue to skyrocket,” said OANDA senior market analyst Edward Moya.

India’s tally of COVID-19 cases jumped by a record 55,078 on Friday to 1.64 million in India.

Oil product exports fell about 6%, their first year-on-year fall since August 2019, primarily driven by declining diesel exports, which slid to their lowest since April last year.

Shipments of diesel also registered their first year-on-year decline since August last year, falling 5.7% to 2.09 million tonnes.

“To contain the rising inventories, some refineries are now planning to conduct maintenance and shutdowns in late third quarter of 2020, which will likely keep exports in check,” said Aaron Cheong, oil product analyst at consultancy Energy Aspects.

The country’s top refiner, Indian Oil Corp, said it would continue to operate its refineries below capacity in 2020/21 as it expected local and overseas fuel demand to remain subdued.

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