Iraq surpassed Saudi Arabia as the top crude oil supplier to India in September, as the top two Organization of the Petroleum Exporting Countries (OPEC) members vie for market share in Asia's biggest economies.
Saudi Arabia was pushed down to the second spot in China last month, with Russia emerging as the top crude oil supplier for the country for the second time in 2015, Reuters reported.
Traders cited an increase in Saudi's official selling price (OSP) of crude as the main reason behind the fall in its market share.
A media report last month said that Saudi Aramco, the world's biggest oil exporter, was planning to set up an office in India by December this year to increase its crude oil sales in the country.
The move was probably due to Saudi Arabia's falling share in India's total crude oil imports; India is the world's fourth largest oil consumer.
India's oil imports from Saudi Arabia stood at 640,300 barrels per day (bpd) in September, down 30% from August, according to data tanker obtained by Reuters.
"Saudi sells oil at OSP under term deals, while Iraqi oil is also sold in the spot market. And in an oversupplied market you often find Iraqi barrels trading at discounts to the OSP," said Ehasan Ul-Haq, senior analyst at London-based consultancy KBC Energy Economics.
Iraq is increasing its share in the world's fast growing economies by selling oil at attractive prices, leading to a decline in Saudi's market share.
While Iraq accounted for nearly 20% of India's oil imports in September, Saudi Arabia saw its share decline to 17% from 22% in August.
The equation is expected to change drastically once oil exports from Iran start flowing into India. Iran will resume its oil exports if sanctions imposed by the Western countries on Tehran' s nuclear programme are lifted.
"When Iran comes to market it will be a tough fight between Iran, Iraq and Saudi," said Haq.