Iraq overtook Saudi Arabia as the top crude exporter to India in September for the third time in 2015, according to Reuters.
Saudi Arabia also lost its top spot in China last month, with Russia overtaking the world’s biggest crude exporter as the main supplier for the second time this year.
Traders attributed the shift to a hike in Saudi’s official selling price (OSP) of crude.
India imported 640,300 barrels per day (bpd) of oil from Saudi Arabia last month, about 30% lower than in August and the weakest in a year, the data obtained by Reuters showed. However, the figure was still up 12.8% from a year ago.
While Saudi’s market share in India is shrinking, Iraq is expanding its hold over the Asian giant by offering attractive pricing. The two biggest OPEC producers are currently battle for market share in leading Asian buyers, as global crude oil prices continue to tumble.
“Saudi sells oil at OSP under term deals, while Iraqi oil is also sold in the spot market. And in an oversupplied market you often find Iraqi barrels trading at discounts to the OSP,” said Ehasan Ul-Haq, senior analyst at London-based consultancy KBC Energy Economics.
India shipped in about a fifth of its imports from Iraq in September, while Saudi Arabia’s share dropped to 17% from about 22% in August.
“When Iran comes to market it will be a tough fight between Iran, Iraq and Saudi,” said Haq.
In the first half of India’s fiscal year running from April to September, Saudi Arabia supplied nearly 19% more oil to India at about 776,000 bpd, while volumes from Iraq surged 36% to about 676,000 bpd.
India is also stepping up purchases from Africa, where more crude is available after China raised shipments from Russia and the United States began processing its own shale oil.
India imported nearly 27% more African crude in April-September, mainly from Angola and Nigeria.
India, which is Iran’s second-biggest customer behind China, bought about 17% more oil from Tehran in the April-September period, the data showed.
