The Covid-19 disruptions have changed the structure of India’s oil and gas sector with telling effects. The share of OPEC crude in Indian oil imports fell to a decade-low in July 2020, reports IANS.
As per data, the oil cartel’s share in India’s oil imports fell to about 67 per cent in July as against highs of 75-80 per cent maintained earlier.
While the share of OPEC crude has been reducing for some time in wake of India expanding its oil import basket to include newer territories in Africa, South and North America, the fall in July has come in wake of Covid-19 which has squeezed demand in the domestic market.
In July, India’s oil imports had also fallen by 36.6 per cent year-on-year to 12.3 million tonnes, the lowest in a decade. The demand is also low on account of restricted movement of vehicles that is the case during the monsoon months.
The lower domestic demand has also forced Indian refiners to operate their refineries at 70-80 per cent capacity. This means they are using less crude to produce products. This has also impacted imports of crude.
Iraq and Saudi Arabia are the two of country’s largest oil sourcing markets. Iraq currently enjoys the top position among markets that supply crude to India.
OPEC had said earlier that world oil demand will fall more steeply in 2020 than previously forecast due to the pandemic and there were uncertainties about next year’s recovery.
World oil demand will fall by 9.06 million barrels per day (bpd) this year, the Organization of the Petroleum Exporting Countries had predicted in its monthly report.
However, OPEC stuck to its earlier forecast that in 2021 oil demand would rebound by 7 million bpd but said the view was subject to large uncertainties that may result in “a negative impact on petroleum consumption,” such as demand for air travel, more fuel-efficient cars and more competition from other fuels.