Crude oil imports in India hit highest level in a year in December

Crude oil imports in the country hit a one year peak in December thanks to the strong demand prospects that prompted refiners to stock up in the world's third-largest oil consumer and importer. Imports of crude oil last month rose 7.1% when compared to 19.65 million tonnes of imports in November, as per data from the Petroleum Planning and Analysis Cell (PPAC) website.

The imports, however, were down 4.1% as compared with a year earlier and were 5% higher from December 2019, that's before the onset of the pandemic. "Indian oil demand continues to recover. Refinery margins remain relatively healthy, which is an incentive for refiners to continue to boost runs," Refinitiv analyst Ehsan Ul Haq said, Reuters reported.

He added that while people are avoiding public transport as far as it is possible, this has increased the usage of passenger cars, thus increasing demand of petrol - the main pillar of demand growth at present. "The only problem is high oil prices, which might limit demand growth in the next few months," Ul Haq added.

However, Rystad Energy Oil Market team's Julie Torgersrud projected that the country's diesel demand is set to decrease by around 100,000 barrels per day in January due to the recent impact of the Omicron variant of the pandemic, while petrol demand will remain flat. “We expect refinery runs to grow by another 500,000 bpd in 2022, as the demand recovery progresses, and new refinery capacity is projected to start up," he said, the wire agency reported.

Reliance Industries, the owner of the world's biggest refining complex, last month imported 1.14 million barrels per day (bpd) of oil, which is a decline of about 8% from November. Total oil product imports fell 2.9% to 3.88 million tonnes from a year earlier, while exports jumped 30.6%. Out of the 6.13 million tonnes of exports in December, diesel accounted for 3.21 million tonnes.