10. OIL

second-largest consumer of LPG after China, with supplies coming from Saudi Arabia and the United Arab Emirates.

Others, including naphtha, jet kerosene and residual fuel oil, all have flat or declining growth rates at 1%, -2% and -5% respectively in 2008-18.

Figure 10.5 Oil demand by product, 2008-18

Transport fuels remain the primary oil products consumed in India, with a rapid demand growth for LPG and ethane.

*Other products include crude oil, “other” natural gas liquids, synthetic fuels, Orimulsion, hydrogen, synthetic crude, refinery gas, aviation gasoline, naphtha-type jet fuel, white spirit, industrial spirit (SBP), lubricants, bitumen, paraffin waxes, petroleum coke, tar, sulphur, aromatics and olefins.

Sources: IEA (2019b), Oil Information 2019, https://www.iea.org/statistics/; IEA (2019d), Monthly Oil Data Service, https://www.iea.org/statistics/mods/.

Oil trade: imports and exports

Crude oil imports

India relies heavily on crude oil imports, as domestic production is not sufficient to meet the country’s soaring refinery activity and end-used demand. Over the past decade, India’s crude oil net imports have increased by almost 90% to 4.3 mb/d in 2017 (DGCIS, 2018). The top three suppliers were all from the Middle East: Iraq (970 kb/d, 21%), Saudi Arabia (800 kb/d, 18%), and Iran (521 kb/d, 11%) (Figure 10.6).

Iraq has replaced Saudi Arabia as India’s top crude oil supplier since 2017. In total, approximately 62% of India’s imported crude oil came from the Middle East, passing through the Strait of Hormuz. The rest came from Africa (15%), South America (10%) and others. As part of India’s efforts to diversify its crude oil sources, Indian Oil Corporation Limited (IOCL) signed a contract with the United States to import 3 Mt (around 61 kb/d) of US crude oil in 2019. Worth USD 1.5 billion, this is the first term contract finalised by an Indian public-sector undertaking (PSU).

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10. OIL

Figure 10.6 Crude oil imports by country, 2013-17

mb/d

Crude oil imports have increased rapidly to meet demand growth.

Source: DGCIS (2018), Annual Report 2017-18,

http://www.dgciskol.gov.in/Writereaddata/Downloads/Annual_Report_2017-2018.pdf

Oil products imports and exports

Despite being a net importer of crude oil, India is a net exporter of refined oil products thanks to its large refining capacity. India produces significantly more diesel and gasoline than needed for domestic consumption, which contributes to its exports of oil products (Figure 10.7). Most of the exported oil products in 2018 (1 306 kb/d) were road transport fuels: 43% diesel and 23% gasoline. The top five countries that imported India’s petroleum products were the United Arab Emirates, Singapore, the Netherlands, China and Turkey.

Figure 10.7 Imports (left) and exports (right) by share of refined oil products, 2018

Sources: IEA (2019b), Oil Information 2019, https://www.iea.org/statistics/; IEA (2019d), Monthly Oil Data Service, https://www.iea.org/statistics/mods/.

However, India is still import-dependent on certain petroleum products. In 2018 India imported 800 kb/d of oil products, primarily petroleum coke (part of other products below) and LPG. India stands as world's second-largest importer of LPG after China. The country's LPG imports have markedly increased over the last five years, surpassing the import volumes of Japan. According to state-owned IOCL, 50% of India’s LPG demand will be met by imports until 2040 (IOCL, 2018). The increased use of LPG as a cleaner

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