India's crude oil importsrose to a four-month high in August, recovering from the near one-year low in July, with refiners buying incremental barrels mainly from Latin America and the United States, tanker data from trade sources showed.
The world's third-biggest oil importer and consumer bought 4.2 million barrels per day (bpd) last month, as some refiners plan to boost runs in anticipation of pent-up demand around the festival season.
The two regions, the United States and Latin America, accounted for about a fifth of India's August imports as refiners booked long-haul crudes in end-May and June to gain from arbitrage. That led to a decline in the share of West Asia and Africa oil, the data showed.
India's imports from Latin America, led by a boost in Mexican supplies, increased to 414,450 bpd oil in August, the highest since December, while shipments from the United States rose to a five-month high of 419,100 bpd, the data showed.
The sources declined to be identified as they are not authorised to speak to the media.
"Long haul WTI-linked oil from Americas was economical to Indians as arbitrage economics were favourable. In the end of May, WTI-linked crudes were trading at a discount of about $3/barrel to Brent," said Ehsan Ul Haq, an analyst with Refinitiv.
Latin American heavy oil is available at a deep discount to WTI, making it even more attractive, he said.
India's August imports were 23% higher than the previous month, when refiners had shut units for maintenance.
Indian refiners curbed crude processing in August as they had high inventory of diesel and exports were not profitable.
Domestic refiners have resumed exports of diesel as prices in overseas markets improved due to higher demand from the West.
This would free up diesel storage and help in raising crude runs and imports in the coming months, said a source at one of the state-run refiners.
The share of West Asian grades in India's August oil imports declined to 61.8% from 64.7% in the previous month, while that of African oil dropped to 14.1% from 16.7%.
That dragged down the share of OPEC's oil in India's overall imports to 67.7% from 77.6%. For April-August, the first five months of this fiscal year, the group's share declined to the lowest.
Last month, Iraq stayed as the top oil supplier to India, followed by Saudi Arabia. The United States climbed four notches to emerge as the third-biggest supplier while Kuwait rose to No.5 from No.6 in July. The United Arab Emirates stayed at the fourth position while Nigeria tumbled by three notches to No.6.
