India’s Crude Oil Imports Hit a Record: Good for Oil Bulls

India’s crude oil imports

India is the second-largest crude oil consumer in Asia after China. It’s the third-largest consumer in the world. The Petroleum Planning and Analysis Cell of India reported that the country’s crude oil imports rose 19% to ~4,830,000 bpd (barrels per day) in September 2017—compared to August 2017. India’s crude oil imports rose 4.2% from the same period in 2016—the highest level ever. The imports rose due to more imports from refineries following the rise in domestic fuel demand. Refiners returned during July and August after the maintenance, which also supported crude oil imports.

High crude oil imports from India are bullish for crude oil (BNO) (DBO) prices. Changes in oil prices impact oil producers (VDE) (IXC) like National Iranian Oil, Denbury Resources (DNR), and Cobalt International Energy (CIE).

India’s Crude Oil Imports Hit a Record: Good for Oil Bulls

India’s crude oil imports

India’s crude oil imports averaged 4.4 MMbpd (million barrels per day) in the first nine months of 2017—1.8% higher than the same period in 2016. Imports averaged 4.0 MMbpd in 2016. They’re expected to rise 7.5% to 4.3 MMbpd in 2017—compared to 2016.

India’s crude oil demand

India’s crude oil demand averaged 4.4 MMbpd in 2016. It’s expected to rise 3% to 4.5 MMbpd in 2017—compared to 2016. OPEC estimates that India’s oil demand could rise 150% to 10.1 MMbpd by 2040 from ~4 MMbpd. Meanwhile, oil majors like Shell (RDS.A), Saudi Aramco, Rosneft, and BP (BP) are trying to tap India’s fuel oil markets.

Impact

High crude oil demand and imports from India could support crude oil (UCO) (USL) prices. Higher oil prices benefit oil tankers like Frontline (FRO) and Nordic American Tankers (NAT).

Read What to Expect from Crude Oil Prices in 2018 for crude oil updates. Read Will US Natural Gas Prices Rise This Winter? for natural gas updates.