Saudi Arabia, regains No.2 Oil supplier status to India in August 2022

Tags: Economy/Finance

According to a Reuters report, Saudi Arabia has become the second largest crude petroleum oil supplier to India in the month of August 2022.For the past three months, Russia was the second largest supplier of crude oil to India while Iraq is still the largest supplier of crude oil to India.

IMPORTANT FACTS -

Reason for Rise in Purchase of Russian Oil :

• India started buying the Russian crude oil after the Russians started offering its crude oil at a heavy discount. This was done by Russia after heavy sanctions were imposed on it by the Western countries after its invasion of Ukraine in February 2022. 
• India which never condemned Russian action started buying Russian oil as it was very cheap compared to the Saudi and other traditional suppliers. 
• India during the March-July period became the second largest buyer of Russian oil after China.

Why Russian oil import has now declined ?

• There are mainly two reasons for Saudi Arabia regaining its second spot. 
• One, the Russians have considerably reduced the discount on its oil which has made its oil less attractive to India.
• Secondly, India has a contractual obligation to buy oil from Saudi and it has to honour the contract. 
• Indian purchase of Russian oil was a short term opportunity for India to buy cheap oil in a market where the international prices were high.

Top oil supplier to India in August month 2022 :

The top supplier of crude oil to India were as follows;

1. Iraq 
2. Saudi Arabia
3. Russia
4. United Arab Emirates 
5. Kuwait

ADDITIONAL INFORMATION -

• India is the world’s third biggest oil importer and consumer.
•  Largest importer of crude oil in the world was China followed by the United States.
• Largest consumer of oil in the world was the United States followed by China and India was at the third spot.