Oil imports decline in August for the third month in row, due to decreasing Russian shipments

According to government data released on Tuesday, India's imports of crude oil decreased for the third month in a row in August as refineries in the third-largest importer in the world underwent maintenance and reduced shipments from Russia.

In August, crude imports decreased 3.9% month-on-month to 18.73 million metric tons, according to data from the Petroleum Planning and Analysis Cell (PPAC).

"Imports are down, which was expected due to refinery maintenance," said LSEG analyst Ehsan Ul Haq.

"Higher prices for Russian oil could also have led to lower imports by Indian refiners," said Haq, adding that demand could nevertheless pick up during the festive season.

According to trade flow data from Kpler and LSEG, India's oil imports from Russia fell to a seven-month low in August as refiners reduced purchases because of maintenance issues and declining discounts.

India also raised the windfall tax on crude in July to limit private refiners from private refiners making gains from robust refining margins in overseas markets, instead of selling at home.

However, as compared to the same month last year, imports as a whole were still up 6.2%. In August of the previous year, imports of oil products increased by 26.5% to 4.06 million metric tons.

Exports of oil-related products increased 11.3% YoY to 5.83 million metric tons in July.

In August, India's consumption of fuel increased slightly from a 10-month low as robust manufacturing activity offset the typical monsoon slowdown.

The weak U.S. shale output and prolonged production restrictions by Saudi Arabia and Russia have caused oil prices to rise to close to $100 per barrel, raising concerns about a short supply.