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India's crude oil imports saw a sharp decline in early March amid disruptions in West Asia, noted a report by Systematix Research, highlighting the impact of the ongoing regional crisis on energy supplies.
"India's import volume also nosedived to just 1.9mn bbls at week ended 6th Mar vs 25mn bbls per week in Feb'26 and 35mn bbls per week in Mar'26," the report said. The report attributed the sharp fall in imports to weakening crude supply from the Middle East, which has been affected by the ongoing tensions and disruptions in the region. "Drop is largely attributed to lower volume from Middle East," it said, noting that key suppliers like Saudi Arabia, Iraq and the UAE saw significant declines in export volumes. "Saudi Arabia dropped to 26mn bbls and 12 mn bbls in the 1st and 2nd week of March vs avg of 42 and 33 mn bbls per week in Feb'26," the report said. The report pointed to broader supply disruptions across the Gulf region and expects further rise in prices and disruption in supply chain. "With the recent strike at energy facilities, including upstream and refining assets across the Gulf countries, we might see further rise in prices and disruption of volume," it said. These developments come at a time when India is already facing risks to its energy security due to disruptions in gas supplies. The Systematix report also highlighted that global LNG flows have been hit due to the same crisis. "Drop is largely attributed to lower volume from Qatar which dropped from 1.7mmt to 0.06mmt," it said. The situation has been aggravated by attacks on energy infrastructure in Qatar. Iranian strikes have damaged key facilities, affecting 17 per cent of the Qatar's liquefied natural gas (LNG) export capacity, posing a risk to India which imports about 47 per cent of its gas from Qatar. The report warned that the ongoing situation could continue to impact countries dependent on energy imports. "We might see further rise in prices and disruption of volume which may have a significant impact on energy deficient countries like India," it said. The report maintained a cautious outlook on the sector. "Due to uncertainty on the escalation of West Asia War, we keep a cautious view on the sector," said the report. The sharp fall in crude imports, coupled with rising prices, is expected to widen India's trade deficit. "Estimated trade deficit on crude oil and petroleum products is estimated to be widened by USD 4 bn+ MoM in Mar'26," the report said. With continued disruptions in both crude and LNG supplies from West Asia, the report indicates that India may face sustained pressure on its energy imports and costs in the near term. (ANI)
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