Imports of Russian naphtha have surpassed supplies from the United Arab Emirates (UAE) in the first nine months of this year, according to ship-tracking data cited by Reuters. Russian sellers shipped around 770,000 tons of naphtha to India between January and September, compared to only 154,000 tons sold throughout 2022. In total, India imported 2.1 million metric tons of naphtha during the nine-month period, with 37% of the imports coming from Russia.
The decline in naphtha supplies from the UAE to India can be attributed to the country’s proximity to Russia and the availability of discounts on Russian energy supplies. Indian producers have increased their imports of Russian naphtha due to the high cost of natural gas, an alternative raw material for the petrochemical industry. Naphtha is primarily used to produce plastics and petrochemicals, and it serves as a raw material for the industry.
Despite the significant increase in imports, India ranks only seventh among the world’s top importers of Russian naphtha, as per data from ship-tracker Kpler. Furthermore, India is also a major producer and exporter of naphtha. Reliance Industries, India’s largest oil-refining complex operator, accounted for a significant portion of the imports, while petrochemical producer HPCL-Mittal Energy has been using naphtha instead of natural gas at its factory in Bathinda.
Traders and energy experts believe that India’s demand for naphtha will continue to grow as new petrochemical projects and refinery maintenance increase the need for blending with gasoline. It is projected that India’s annual consumption of petrochemicals will triple to around 80 million tons by 2040.
In conclusion, Russia has become India’s top supplier of naphtha, surpassing the UAE in terms of imports. India’s reliance on Russian naphtha is driven by the cost advantages and availability of discounts on Russian energy supplies. The country’s demand for naphtha is expected to further increase in the coming years due to new petrochemical projects and refinery maintenance.