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NEW DELHI (Reuters) – Indian oil imports from Iran in 2018-2019 may be higher than the year before, despite the imposition of US sanctions, reveals an analysis of sector data by Reuters, forcing the government to limit its purchases in the coming months.
FILE PHOTO: General view of an oil basin seen from a ship at the port of Kalantari in the city of Chabahar, 300 km east of the Strait of Hormuz, January 17, 2012. REUTERS / Raheb Homavandi
Indian oil imports from Iran jumped about 34% in April-October from the previous year, reaching 603,000 b / d, or 17.7 million tonnes, according to data on arrivals of tankers.
This sharp increase is attributable to the advance purchase of purchases made by Indian refiners, before the entry into force of new US sanctions against Tehran, entered into force Monday.
By stifling the Iranian oil and sea industries, Washington intends to try to force Tehran to give up its nuclear ambitions and its ballistic missile program, as well as its support for militant proxies in the Middle East.
The United States has granted exemptions to India, China and six other countries, allowing them to continue temporarily to buy Iranian oil, but these exemptions are subject to conditions.
For India, Iran's second-largest customer, the 180-day waiver allows refiners to purchase up to 1.25 million tonnes a month, or about 300,000 bpd. This means that India will have to reduce its monthly purchases of Iran by about half to comply with the waiver.
Analysts still expect India's purchases of Indian crude oil in the fiscal year ending March 2019 to exceed 452,000 b / d, or 22.6 million tonnes, imported during the course of the year. previous year, according to government data.
But there have been signs of declining demand. In October, India imported about 466,000 barrels a day of Iranian oil, according to preliminary data on oil tanker arrivals from different sources, a decrease of 11.6 percent from September and a slightly lower than last October.
According to oil industry analysts, most Indian refiners have increased their Iranian purchases ahead of US sanctions, with Iran offering almost free delivery and longer credit periods.
Refiners also wanted to offset the impact of rising global oil prices and the weakness of the Indian rupee.
"Indian refiners have imported a lot of Iran during the first half of the year, mainly because of the reduction offered by Iran," said Sri Paravaikkarasu, head of the company. East of Suez Oil at FGE in Singapore.
She added that New Delhi could even ask refiners to reduce their imports below the waiver threshold in order to win favor with Washington.
Last year, India's imports declined as refiners limited Iranian oil purchases due to a dispute with Tehran over the development rights of a giant gas field.
Indian state refiners, which control about 60 percent of the country's capacity, signed a contract to purchase 396,000 barrels of Iranian oil in the current fiscal year. But with the new American sanctions in place, they will now have to tell Iran that they can not respect these agreements.
Report by Nidhi Verma; Edited by Martin Howell and Susan Fenton
