India’s export of petroleum products remained muted in the first half of the current financial year 2024-25, while the imports surged 10% for the period, as per data from Petroleum Planning and Analysis Cell.
The country exported 31.0 million tonnes of refined oil products during April to September, almost unchanged from 30.7 million tonnes in the same period of last fiscal. Imports, on the other hand, stood at 25.8 million tonnes, up from 23.4 million tonnes in April-September 2023.
Import bill for the refined oil products also increased by 13% to $12.1 billion against the corresponding period of last year.
While the country’s exports of petroleum products have just begun to revive after the tensions over the Red Sea that prompted shipping rates to increase, the rising global uncertainty and geopolitical tensions have once again posed threats to the country’s trade of refined oil products.
Union minister for petroleum and natural gas Hardeep Singh Puri on Tuesday said that there is no shortage of oil in the market but if there are geopolitical tensions it may increase the cost of freight for shippers.
“Now, there are other factors like geopolitical tensions. There is no shortage. But if there is tension in one part of the world and if you have to take a longer route, then the cost of freight, insurance, etc., will go up. There is more than enough oil in the world, and prices should hopefully come down. That is my personal expectation,” he said.
Analysts say that any further escalation of the conflict around the Middle East can impact Indian supplies of crude oil and refined oil products. The key red sea route has largely been avoided by shippers after the conflict began, with shipping rates witnessing an uptick.
Besides imports of Russian crude, the majority of India’s crude imports and product exports to the West of Suez transit via the Cape of Good Hope. Indian refiners have been seen taking the Cape of Good Hope route for oil product exports ever since Red sea issues cropped up. Africa’s Cape of Good Hope shipping route can extend voyages for up to 14 days or beyond, as per industry people and analysts.
The country exports a variety of goods via the Red Sea including petroleum products. However, the traffic diversion from the Red Sea and around the Cape of Good Hope on the back of escalating tensions over the Sea has added ten days to Asia-Europe journeys while also increasing fuel costs, as per the government.
India primarily supplies petroleum products to countries in Europe and Asia. The country has emerged as a major fuel supplier to Europe in the past few months after European countries started boycotting Russian supplies post its invasion of Ukraine.
From: financialexpress
Financial News
