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SOURCE: REUTERS

India’s crude oil imports rose in December on firm demand, data from Petroleum Planning and Analysis Cell (PPAC) showed on Monday. Crude imports in December rose 1.1% year-on-year to 19.83 million metric tons, the data showed, up 7.4% on a monthly basis.

Fuel consumption in India, the world’s third-biggest oil importer, rose to a seven-month high in December. “There is a general economic pick up, which is a contributor to rising imports,” said Prashant Vasisht, vice president and co-head, corporate ratings at ICRA.

Crude futures lost over 10% in 2023 in a tumultuous year of trading marked by geopolitical turmoil and concerns about the oil output levels of major producers. [O/R]

Besides growing Indian oil demand, lower crude prices also supported imports, said Giovanni Staunovo, analyst at UBS.

India’s imports of Nigerian crude jumped from November to December, as the country took advantage of Nigeria’s large overhang of cargoes, data showed.

Data from the PPAC website also showed product imports decreased 4% to 3.89 million tons from December last year, while product exports were 2.5% higher over the same period to 5.84 million tons.

An interesting trend “is the strong increase in diesel exports. I guess most of it ended in Europe, as EU counties banned imports of Russian oil,” added Staunovo.

Export of diesel, mainly used by trucks and commercially run passenger vehicles, jumped 18% to 2.84 million tons compared with last year.

The European Union has introduced bans on sea-borne crude oil and oil product imports from Russia over the conflict in Ukraine.

Freight costs have risen sharply as vessels have been diverted away from the Red Sea to longer routes due to attacks by Yemen’s Iranian-backed Houthi group. Shipping costs from Asia to Europe have risen 350%, Goldman Sachs said.

India’s Hindustan Petroleum Corp Ltd said it does not expect supply disruption due to the Red Sea crisis.”Some part of India’s crude comes through the Suez Canal. Right now there is not much impact, but if the situation snowballs into something bigger, then there will be impact,” said Vasisht.