Middle East share of India’s oil imports falls to 4-year-low

India’s oil imports in 2019 fell to 4.48 million bpd as refiners temporarily shut processing units for upgrades ahead of new fuel standards in 2020. (Shutterstock)
Short Url
Updated 20 January 2020

Middle East share of India’s oil imports falls to 4-year-low

  • Oil minister says India is working to diversify its oil supply sources

NEW DELHI: Indian imports of Middle Eastern oil plunged to a four-year low in 2019, tanker data shows, as the energy-hungry nation diversifies its supplies to cut costs and shield itself from geopolitical tensions.

India, the world’s third-biggest oil consumer, imports about 84 percent of its oil needs and traditionally relies on the Middle East for the majority of its supplies. However, the region’s share of India’s crude shrank to 60 percent last year — down from 65 percent a year ago and the lowest since 2015 — as record output from the US and elsewhere offered opportunities for importers to tap other sources.

India shipped in 2.68 million barrels per day (bpd) oil from the Middle East in 2019, down about 10 percent from 2018, and around 1.8 million bpd from elsewhere, the data reviewed by Reuters showed.

Deeper than expected oil output cuts by OPEC and allies, shouldered by Saudi Arabia, and less supply from Iran due to US sanctions also dented India’s intake of Middle Eastern oil, said Ehsan Ul Haq, analyst with Refinitiv.

Last year, sanctions and output cuts by OPEC and its allies, known as OPEC+, reduced the group’s supplies by 1.9 million bpd from 2018, while non-OPEC supply rose by 2 million bpd, the International Energy Agency said in its latest report. The IEA forecast that producers outside the OPEC+ pact would increase supplies by 2.1 million bpd in 2020.

India is working to diversify its oil supply sources to cut dependence on the Middle East, Oil Minister Dharmendra Pradhan said last week.

The drive to expand crude sources also reflects a push by Prime Minister Narendra Modi to bolster ties with countries such as Russia and the US.

India’s overall oil imports in 2019 fell by about 2.1 percent to 4.48 million bpd, the data showed, because most refiners temporarily shut processing units for upgrades ahead of new fuel standards in 2020. India is migrating to Euro VI compliant fuel from April 1.

Imports from CIS (former Soviet Union) nations rose in 2019 by about 65 percent to 171,000 bpd, the data showed. Intake of African grades rose by 7.3 percent to about 713,000 bpd, while US supplies was up by about 63 percent to 181,000 bpd. US oil accounted for about 4 percent of India’s overall imports in 2019, up from just 2.5 percent a year earlier.

Demand for heavy Middle Eastern grades was also affected by a shift in bunker fuel specifications from January, following new rules promoting lower sulfur fuels.

“Most Middle Eastern grades yield high sulfur fuel oil (HSFO) and because of new marine fuel norms, refiners are buying more from other producers to cut production of HSFO and increase output of very low sulfur fuel oil,” Haq said.


Nissan’s new CEO willing to be fired if no turnaround at Japanese giant

Updated 18 February 2020

Nissan’s new CEO willing to be fired if no turnaround at Japanese giant

  • Makoto Uchida, who took over the top job in December, put his job on the line at the automaker’s shareholders’ meeting
  • Uchida pleaded with shareholders to be patient while he comes up with a plan by May to recover from crumbling profits

YOKOHAMA: Nissan’s new chief executive said on Tuesday he would accept being fired if he fails to turn around Japan’s second biggest automaker which is grappling with plunging sales in the aftermath of the scandal surrounding ex-chairman Carlos Ghosn.
Makoto Uchida, who took over the top job in December, put his job on the line at the automaker’s shareholders’ meeting, where he faced demands ranging from cutting executive pay to offering a bounty to bring Ghosn back to Japan after he fled to Lebanon.
Nissan’s worsening performance has heaped pressure on Uchida, formerly Nissan’s China chief who became its third CEO since September, to come up with aggressive steps to revive the company.
On Tuesday, Uchida, who was repeatedly heckled by shareholders, said he was ready to face dismissal if he failed to improve profitability at the company, which is on course to post its worst annual operating profit in 11 years.
“We will make sure that we steer the company in an effective way so that it is visible in the eyes of viewers. I will commit to this: if the circumstances remain uncertain you can fire me immediately,” he said.
Uchida, 53, did not give a timeframe for improving Nissan’s performance.
The new boss must prove to the board he can accelerate cost-cutting and rebuild profits at the 86-year-old Japanese giant, and that he has the right strategy to repair its partnership with France’s Renault, sources have told Reuters.
Uchida pleaded with shareholders to be patient while he comes up with a plan by May to recover from crumbling profits and a corporate shake-up following Ghosn’s arrest in Japan in late 2018 over financial misconduct charges.
“If you can be patient a little bit longer, on a day-to-day basis you will be able to sense we are changing,” he said.
Ahead of the meeting, some shareholders demanded more clarity about Uchida’s plan.
“I just want to know what the plan for recovery is. At the moment, the share price has dropped again, and the value of the company has plummeted,” said a 70-year-old former employee who owns shares in the company.
“If this is the situation, part of me thinks that we would be better off with Ghosn ... If we don’t get a clearer vision of the path the company is taking, it will be a worry.”
Nissan’s shares are trading around their lowest level in more than a decade following its latest earnings.
Last week, Nissan cut its dividend outlook to its lowest since the 2011 financial year, after dwindling car sales drove the company to post its first quarterly net loss in nearly a decade.
Shareholders gathered at the extraordinary meeting in Yokohama to vote in new directors including Uchida and Chief Operating Officer Ashwani Gupta.
Their appointments highlight a changing of the guard at Nissan, as shareholders were also voting on motions for former company stalwarts, CEO Hiroto Saikawa and COO Yashuhiro Yamauchi, to leave their board director positions.