Venezuela`s crude shipments to India, its third largest export market, fell 21 percent in the first half of the year, according to internal documents from state-run PDVSA, adding to supply troubles for Indian refiners as they are increasingly pressed to diversify oil imports.
Venezuela`s production decline to a 30-year low and shipping woes stemming from payment delays, lack of investment and mismanagement, are affecting almost all of the OPEC-nation`s customers.
But the impact on India is notable and comes as its refiners are now preparing for a "drastic reduction to zero" of oil imports from U.S.-sanctioned Iran.
Last week, PDVSA officials met with executives from India`s Reliance Industries and Russia`s Rosneft, which owns a majority stake in India-based refining firm Nayara Energy, to discuss trade issues, the state-run company said.
The talks focused on how to remedy export delays, according to a person familiar with the matter.
Venezuela sent almost 280,000 barrels per day (bpd) of crude to India in the first half of the year, a 21 percent drop versus the 355,500 bpd shipped in the same period of 2017, according to PDVSA trade documents.
The decline is the second steepest after the United States, which has suffered a drop of about 30 percent in crude imports from Venezuela this year, the documents seen by Reuters show.
If crude supplies from Iran and Venezuela, two of India`s top five oil suppliers, cannot be secured in coming months, some of the nation`s refiners would have to rely almost entirely on sourcing the heavy barrels they need from Iraq, according to analysts.
"Indian refiners are very worried about supply from Iran, but also from Venezuela," said Robert Campbell from consultancy Energy Aspects.
Saudi Arabia is expected to increase exports to India in the short term, but those barrels would not match the quality of the missing Venezuelan crude, he added. "The lack of heavy barrels is not a problem only in the Atlantic Basin but in Asia as well," he added.
PDVSA did not reply to requests for comment. India`s Reliance declined to comment and Nayara did not immediately respond to a request for comment.
India is the world`s fourth largest refiner after the United States, China and Russia. While Chinese and Russian firms resell a large portion of the Venezuelan crude and fuel they receive to monetize oil-for-loan agreements, Indian refiners need the barrels they get through crude supply contracts with PDVSA.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)