Iraq overtook Saudi Arabia as the top crude exporter to India in September for the third time in 2015, according to tanker data obtained by Reuters, as the two biggest OPEC producers battle for market share in leading Asian buyers.
Saudi Arabia also lost its top spot in China last month, with Russia overtaking the world’s biggest crude exporter as the main supplier for the second time this year. Traders attributed the shift to a hike in Saudi’s official selling price (OSP) of crude.
India imported 640,300 barrels per day (bpd) of oil from Saudi Arabia last month, about 30 percent lower than in August and the weakest in a year, the data obtained by Reuters and compiled by Thomson Reuters Oil Analytics showed. The figure was still up 12.8 percent from a year ago.
While Saudi’s market share in India is shrinking, Iraq is expanding its hold over one of the world’s fastest-growing markets by offering attractive pricing.
“Saudi sells oil at OSP under term deals, while Iraqi oil is also sold in the spot market. And in an oversupplied market you often find Iraqi barrels trading at discounts to the OSP,” said Ehasan Ul-Haq, senior analyst at London-based consultancy KBC Energy Economics.
India shipped in about a fifth of its imports from Iraq in September, while Saudi Arabia’s share dropped to 17 percent from about 22 percent in August.
Faced with more competition in Asia, Saudi Arabia is trying to make inroads into new markets like Poland and along with other big exporters prepare for more competition from Iranian crude.
“When Iran comes to market it will be a tough fight between Iran, Iraq and Saudi,” said Haq.
In the first half of India’s fiscal year running from April to September, Saudi Arabia supplied nearly 19 percent more oil to India at about 776,000 bpd, while volumes from Iraq surged 36 percent to about 676,000 bpd.
India is also stepping up purchases from Africa, where more crude is available after China raised shipments from Russia and the United States began processing its own shale oil.
India imported nearly 27 percent more African crude in April-September, mainly from Angola and Nigeria.
India, which is Iran’s second-biggest customer behind China, bought about 17 percent more oil from Tehran in the April-September period, the data showed.
Overall oil imports by India slipped 7.4 percent last month from August as Essar Oil, which rarely buys Saudi oil, shut its 400,000 bpd refinery for a month from mid-September for maintenance.