India's crude oil imports dropped to their lowest point since February 2015 in June, while year-on-year refined fuel exports decreased for the first time in almost a year, according to government data on Friday.
Crude oil imports decreased last month from around 19 per cent a year earlier to 13.68 million tonnes, down for the third straight month, according to data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas.
"This is likely driven by not yet fully recovered oil demand and expectation that it might take longer to have Indian oil demand rising strongly again," said UBS analyst Giovanni Staunovo.
"Together with higher crude imports at the start of the year, crude tanks are still well filled, reducing the need to import more crude oil for now."
Fuel demand in India, the world's third-largest oil importer and consumer, dropped 7.8% in June compared to a year ago, with growing coronavirus cases and increasing retail prices hammering demand.
"India's fuel demand recovery will continue to stall as coronavirus cases continue to skyrocket," said OANDA senior market analyst Edward Moya.
Oil exports dropped by around 6 per cent, their first year-on-year fall since August 2019, led mainly by falling diesel exports, which have fallen to their lowest since April last year. Diesel exports have registered their first year-on-year drop since August last year, dipping 5.7 per cent to 2.09 million tonnes.
"To contain the rising inventories, some refineries are now planning to conduct maintenance and shutdowns in the late third quarter of 2020, which will likely keep exports in check," said Aaron Cheong, oil product analyst at consultancy Energy Aspects.
The country's largest refiner, Indian Oil Corp, said that it will continue to run its refineries below capacity through 2020/21, as it anticipated local and overseas fuel demand to stay subdued.