Iraq Is New Oil King, defeated the Saudis in Fastest Growing Market

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Iraq was the top raw oil supplier to India for a third month in May, shipping 1 million barrels a day, according to shipping data compiled by Bloomberg. As the data showed, Iraqi supplies amounted for 23 percent of India’s purchases last month, up from an average 19 percent in the previous four months, while Saudi Arabia’s proportion decreased by 1 percentage point to 17 percent.

Oil producers are facing increasing competition in major markets like China and India as OPEC and its partners continue efforts reduce oil production to clear a global excess. The International Energy Agency expects India to be the fastest-growing consumer through 2040, since it imports more than 80 percent of its requirements of raw oil in the amount of $2 trillion.

R. Ramachandran, the head of refineries at Bharat Petroleum Corp., India’s second-biggest state-run refiner said, that Saudis used to be the king when it came to oil supply, but then it was becoming a prince. He also added that preference for Iraqi raw oil would continue as Indian refiners continued with refinery upgrades.

Iraq, which had been the № 2 seller to India for years, was able to overtake the Saudis as Indian oil refiners have implemented the modernization of the plant over the last couple of years, allowing them to refine raw oil with higher sulfur content.

The Middle East nation has also improved its port infrastructure to provide a constant supply. According to Ramachandran, Iraqi raw oil used to be less preferred as a result of delays and contradictions  in shipments as the Gulf nation had not the required port infrastructure.

The chairman of Hindustan Petroleum Corp., Mukesh Kumar Surana said, Iraqi raw oil was getting attractive, suited their refineries very well and the price became very competitive.