India’s crude oil imports
India is the third-largest crude oil consumer in the world. India’s crude oil imports increased 12.5% to a record high of 4.93 MMbpd (million barrels per day) in January 2018—compared to the previous month. The imports increased 13.6% from a year ago.
US crude oil prices hit a three-year high on January 26, 2018, due to record imports from India and China, supply cuts, and strong oil demand. Brent and US crude oil prices have risen more than 40% since June 21, 2017. The United States Brent Oil ETF (BNO) and the United States Oil ETF (USO) follow Brent and WTI crude oil futures, respectively. BNO and USO have risen ~49% and ~41%, respectively, since June 21, 2017.
Drivers of India’s crude oil imports
India’s crude oil imports rose due to the rise in demand and expanding refinery capacity. Imports also rose due to upcoming spring maintenance at India’s refineries.
India’s oil consumption estimates
India’s oil consumption averaged ~4.6 MMbpd in 2017. Oil consumption could average ~4.8 MMbpd in 2018, according to the EIA. Energy consultancy FGE estimates that India’s crude oil demand growth could increase 4.3% in 2018.
Improving domestic oil demand and rising refining capacity will drive crude oil imports in 2018. High demand from India would have a positive impact on crude oil prices in 2018.
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