Disruptions to oil shipments through the Strait of Hormuz caused by the ongoing Israeli-United States conflict with Iran has boosted Nigeria’s crude exports to India in recent weeks as the country’s refiners turned to African and Latin American for supplies.
According to data from global commodities tracking firm Kpler cited by Reuters, Indian refiners increased purchases from Nigeria, Angola, Brazil and Venezuela in April and May to offset supply disruptions from the Middle East.
India, the world’s third-largest oil importer and consumer, had relied heavily on crude supplies from the Middle East before the conflict escalated and shipping movements through the Strait of Hormuz became restricted.
The Strait of Hormuz is regarded as one of the world’s most strategic oil transit routes, with a significant share of global crude exports passing through the waterway daily. Gulf producers including Iraq, Kuwait, Qatar and Bahrain depend largely on the route for exports.
The Reuters report stated that higher imports from Nigeria and other alternative suppliers came as India also continued to buy discounted Russian crude despite a temporary decline in Russian shipments.
Data from Kpler showed that India reduced crude imports from Russia by about 29.4 per cent from March levels to about 1.6 million barrels per day after Nayara Energy shut its 400,000-barrel-per-day refinery for maintenance.
However, Russian crude remained India’s largest source of oil imports, followed by the United Arab Emirates and Saudi Arabia.
The report noted that Nigeria benefited from India’s efforts to diversify supply sources amid uncertainty surrounding Middle Eastern exports.
India’s imports from the United Arab Emirates reportedly rebounded in April to about 669,700 barrels per day from 230,600 barrels per day in March, while imports from Saudi Arabia remained around 619,500 barrels per day.
The UAE and Saudi Arabia are among the few Gulf producers with pipeline infrastructure capable of bypassing the Strait of Hormuz for some exports.
Overall, India imported about 4.57 million barrels per day of crude oil in April, largely unchanged from March figures but about 15.5 per cent lower than the volume recorded in the corresponding period last year, according to the Kpler data.
Reuters reports that Venezuela is also on course to become one of India’s top crude suppliers in May as refiners continue to seek alternatives to Middle Eastern grades.
Last month, India reportedly halted purchases from Iraq after Iraqi exports were disrupted by the regional conflict.
The development comes amid heightened tensions in the Gulf following months of hostilities involving Israel, Iran and the United States, which have raised fears over global oil supply security and sharp volatility in international crude prices.
Oil traders and analysts have repeatedly warned that any prolonged disruption to shipping activities in the Strait of Hormuz could significantly tighten global crude supply and push fuel prices higher across importing nations.
With the tension in the Middle East, Nigerian oil producers are enjoying the windfall from higher oil prices while the masses battle higher fuel prices.
