Economy

Iran becomes India’s No. 2 oil supplier

Oil bounty: Iran offers almost free shipping and extended credit period on oil sales.   | Photo Credit: Raheb Homavandi

Iran was the second-biggest oil supplier to Indian state refiners between April and June, India’s Oil Minister said on Monday, replacing Saudi Arabia as companies took advantage of steeper discounts offered by Tehran.

India, Iran’s top oil client after China, shipped in 5.67 million tonnes or about 4,57,000 barrels per day (bpd), of oil, from the country in the first three months of this fiscal year, Dharmendra Pradhan told lawmakers in a written reply.

He did not provide comparable numbers from the year-ago period. Data compiled by Reuters shows that India imported about 3.46 million tonnes, or about 2,79,000 bpd, from Iran between April and June last year.

State refiners, accounting for about 60% of India’s 5 million bpd refining capacity, had curbed imports from Iran last year in protest against Tehran’s move to grant development rights for the giant Farzad B gas field to other parties. The refiners — Indian Oil Corp, Chennai Petroleum Corp, Bharat Petroleum and its unit Bharat Oman Refineries Ltd., Hindustan Petroleum and Mangalore Refinery and Petrochemicals — shipped in 9.8 million tonnes of Iranian oil in 2017/18, about a quarter less than a year ago, Mr. Pradhan’s reply showed.

Doubling shipments

For this fiscal year, the refiners had decided to almost double imports from Iran, which offered almost free shipping and extended credit period on oil sales.

Iraq continued to be the top oil supplier to India in the April-June period.

New Delhi shipped in 7.27 million tonnes of oil from Iraq, while shipments from Saudi Arabia totalled 5.22 million tonnes, making it the third largest supplier, Mr. Pradhan’s statement showed.

Pressure to cut imports

India and other major buyers of Iranian oil are under pressure to cut imports from the country after Washington in May withdrew from a 2005 nuclear deal with Tehran and decided to reimpose sanctions on the OPEC member.

The first set of sanctions will take effect on August 6 and the rest, notably in the petroleum sector, following a 180-day ”wind-down period” ending November 4.

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Printable version | Mar 9, 2021 11:32:44 AM | https://www.thehindu.com/business/Economy/iran-becomes-indias-no-2-oil-supplier/article24497462.ece

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