BENGALURU: India refiners’ crude processing remained resilient in June, holding above pre-pandemic levels amid steady demand, while production eased with the increased availability of cheaper Russian crude, government data showed on Friday.
Throughput in June was about 4.7% lower than last month, but up over 17% year-on-year to 5.27 million barrels per day (21.58 million tonnes), the data showed.
It was also about 23% higher compared with the same period in 2020, and 6.3% higher than in June 2019, before the onset of the COVID-19 pandemic.
“It’s a surprisingly strong result for a monsoon-season-impacted month.... Refining margins have never been this good – the role of India buying up cheap Russian barrels remains a case in point,” said Viktor Katona, co-head of crude analysis at Kpler, forecasting a slight dip in July-August, to 5.2 and 5.15 million bpd following the retreat from May.
“For a more reflective reference, crude throughput in June 2019 stood at (about) 5 million bpd – at that point there was no COVID, nothing of a huge downside factor. So this just goes on to prove that Indian refining is looking strong.”
Indian refiners have been snapping up exports at steep discounts to Brent and Middle East staples with Western sanctions having pushed spot prices for Russian crude to record discounts against other grades.
Moscow replaced Saudi Arabia as the second biggest oil supplier to India after Iraq for the second month in a row in June.
Fuel consumption in June in the world’s No.3 oil consumer rose by 17.9% from a year earlier.
Crude oil production, meanwhile, was down 1.6% to about 600,000 barrels per day (2.44 million tonnes) in June, dipping over 4% versus the previous month.
Natural gas output rose 1.1% year on year to 2.81 billion cubic metres.
“It’s the private sector that has seen the biggest discrepancy between production targets and actual output, aggravated by field incidents and well failures,” Kpler’s Katona said.
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