OPEC Loses Out to Russia and Others in India as Output Cuts Bite

(Bloomberg) -- OPEC’s efforts to reduce the global glut by curbing production have come at a cost.

The Organization of the Petroleum Exporting Countries’ top producers including Saudi Arabia, United Arab Emirates and Venezuela saw their slice of the pie in the world’s fastest growing oil market shrink last year, shipping data compiled by Bloomberg show. Other suppliers from outside the group took advantage and increased shipments, gaining a stronger hold in the South Asian country.

OPEC Loses Out to Russia and Others in India as Output Cuts Bite

Shipments from suppliers including Russia, Kazakhstan, Oman, Sudan, Mexico, Brazil and U.S. surged in 2017, aided by the OPEC curbs and a favorable price differential between the global benchmark Brent and Dubai crude, the Middle East marker. Share of non-OPEC supplies in India’s overall crude imports rose to 16 percent in 2017 from 11 percent a year earlier, while that of OPEC producers declined to 84 percent from 89 percent.

INDIA TANKER TRACKER: Non-OPEC Suppliers Emerge Winners in 2017

While Russia is part of the agreement to limit supplies, it achieved record output in October 2016, a month before the accord with OPEC was announced. Russia has also beaten Saudi Arabia most of last year as the top crude supplier to China, the world’s biggest buyer.

The Middle East producers will remain key suppliers for India in the medium to long term, still rising non-OPEC shipments will continue to be a trend for at least another year, Tushar Tarun Bansal, a consultant from McKinsey Energy Insights, said by phone from Singapore.

©2018 Bloomberg L.P.