OPEC’s share of India’s oil imports fell at the fastest pace in 2022/23 to the lowest in at least 22 years, as intake of cheaper Russian oil surged, data obtained from industry sources show, and the major producers’ share could shrink further this year.

Members of the Organization of the Petroleum Exporting Countries (OPEC), mainly from the Middle East and Africa, saw their share of India’s oil market slide to 59 per cent in the fiscal year to March 2023, from about 72 per cent in 2021/22, a Reuters analysis of the data that dates back to 2001/02 showed.

Russia overtook Iraq for the first time to emerge as the top oil supplier to India, pushing Saudi Arabia down to No. 3 in the last fiscal year, the data showed.

OPEC’s share shrank as India, which in the past rarely bought Russian oil due to high freight costs, is now the top oil client for Russian seaborne oil, rejected by Western nations following Moscow’s invasion of Ukraine in February 2022.

India shipped in about 1.6 million barrels per day (bpd) of Russian oil in 2022/23, the data showed, about 23 per cent of its overall 4.65 million bpd imports.

The decision by OPEC and their allies, a group known as OPEC+ to cut production in May could further squeeze OPEC’s share in India, the world’s third largest oil importer, later this year if Russian supplies stay elevated.

“Russian crude is already cheaper than the similar Middle Eastern grades and it seems OPEC is harming itself by a reduction in output,” said Refinitiv analyst Ehsan Ul Haq.

“It will further erode its market share in Asia.”

Higher intake of Russian oil boosted the share of Commonwealth of Independent States (C.I.S.) countries to a record 26.3 per cent, and reduced that of Middle Eastern and African nations to a 22-year low of 55 per cent and 7.6 per cent, respectively.

In 2021/22, Middle East’s share was 64 per cent while Africa’s was 13.4 per cent, the data showed. Latin America’s share declined to a 15-year low of 4.9 per cent in 2022/23.

India’s oil imports in 2022/23 rose 9 per cent from a year earlier, as state refiners cranked up runs to meet rising local fuel demand after private refiners turned to exports instead of selling fuel at below-market rates domestically, the data showed.

Local refiners together processed about 6 per cent more crude in 2022/23 at about 5.13 million bpd, government data show.

In March, India shipped in nearly 5 million bpd of oil, marginally higher than the previous month, with Russian oil accounting for about 36 per cent of overall imports, the data showed.

“OPEC’s output cut decision is helping Russia as well,” said Haq, adding the planned supply cut has lifted global oil prices and at the same time narrowed the discounts for Russian oil against Brent and Dubai benchmarks.

Some Russian cargoes are being priced above $60 a barrel – a cap imposed by the Group of Seven nations, European Union and Australia to curb Moscow’s revenues while allowing traders to access western ships and insurance.