Record high oil imports

Record high oil imports
India’s oil imports have hit a record high in September 2017 as the nation imported 4.83 million barrels per day (bpd) of oil..

India’s oil imports have hit a record high in September 2017 as the nation imported 4.83 million barrels per day (bpd) of oil.


India is heavily dependent on crude oil imports, with petroleum crude accounting for about 34 percent of the total inward shipments.

In terms of sheer oil consumption, India ranks third behind China and the US. Its oil consumption is at 5.5% globally as of 2016. The total primary energy consumption from crude oil is 212.7 Mtoe and is about 29.38% of all India’s energy consumption. As the nation has continued to develop economically, its consumption has also significantly growth. Between 2005 and 2015, India's oil consumption grew 4.9 per cent while global growth was 1 per cent. “India could very well be the biggest contributor of incremental oil demand growth for the next few years, led by its strong economic growth,“ said Vandana Hari of Vandainsight in Singapore. “It could overtake China as the country adding the most to global oil demand in absolute terms despite a much smaller base because, just as India's consumption is rising strongly, Chinese demand is cooling off.”

In 2011, HSBC revealed that India’s planning commission projects that dependence on energy imports could double to 53% of commercial energy consumption in 2031-32 from about 25% in 2003-04.

India is heavily dependent on oil rich nations especially OPEC countries for its oil imports. Currently, Iraq and Saudi Arabia are the top two countries that India imports oil from. In April 2017, India's imports from Iraq topped 1 million barrels per day (bpd). Iran has gone from being India’s sixth largest supplier to India’s third largest supplier. Iran sold 19.8 million tonne crude oil to India in the first nine months of the 2016-2017 fiscal year. For the same period, Sauid Arabia sold India 30.3 MT and Iraq sold India 29.1 MT. Venezuela supplied 23.6 MT, Nigeria 23.4 MT and UAE sold India 15.7 MT of crude oil.

Indian Oil Corporation is a state-owned oil and gas company. It was founded in 1964. It is the largest commercial enterprise in India.

Petrol and diesel prices in India have gone up exponentially in 2017. For a detailed analysis of this issue, click here.


India’s oil imports for the month of September has hit an all time high. According to data that has been published, India imported 4.83 million barrels per day (bpd) of oil in September. This is amidst a period when many refiners resumed operations after extensive maintenance to meet rising local fuel demand.

"There was heavy maintenance at some refineries in July-August. All those refineries have come online, so naturally refiners will have to boost purchases to meet local demand," said Senthil Kumaran, senior analyst at energy consultant FGE.

In September 2017, India shipped in 4.2 percent more oil last month than what it imported a year earlier. Additionally, it imported 19% more than what it shipped in the month of August. The data was derived from shipping records and analysis by Thomson Reuters Analytics. Between the months of April and May, maintenance turnaround at some refineries led to Indian Oil Corp deferring the shutdown of its 300,000 bpd coastal Paradip refinery. In addition to shipping from Middle East countries, India has also shipped from countries in Africa as well as Latin American nations like Venezuela. In 2017, India began importing crude oil from the US as well.

India currently imports 80% of its oil needs. As the country continues to grow, its needs have also exploded. Thus, the nation has become a key component driving oil demand across the world. India’s fuel demand has increased by 6.1% according to U.S. Energy Information Administration.

Forecasts have stated that India might soon overtake China as the fastest growing oil market in the continent. OPEC has stated that it expects India’s current oil demands to grow by 150% by 2040.


Our assessment is that India, which depends on imports to meet 80% of its oil needs, will have to spend approximately 9200 crores more every year for a one dollar per barrel increase in crude prices. Consequently, every rupee per litre increase in fuel leads to a 0.02 – 0.07 rise in WPI inflation. Oil prices impact both the current as well as fiscal deficit. The target of 3.2% fiscal deficit will be difficult to achieve if prices of crude oil goes northwards of US$ 60.