India will be hit by the Trump administration's decision to end waivers that allowed the import of crude oil from Iran without facing U.S. sanctions. Iran has been among India's top and most preferred sources of crude oil. Crude from Iran came with discounts on shipping, insurance, and freight and longer credit period. Crude from the U.S., an alternative exporter, comes at a hefty price.
Crude sources from abroad
Iran has been one of India's top-suppliers of crude oil over the years. In 2018-19, 10.9% of India's crude demands were met by imports from Iran. While Iraq is India's top-supplier of crude oil since 2017-18, these has been a sudden jump of 288% in imports from the U.S. since 2017-19. The chart shows India's top suppliers of crude oil and their contribution over the years.
India's top crude oil importers (in million tonne)
Contrasting fortunes
There has been a huge rise of 734% of global crude oil exports from the United States from 2013 to 2017. Iran's crude oil exports dipped in 2013 following global sanctions. The exports recovered after the sanctions were lifted. The chart shows crude exports of the U.S. and Iran.
A comparison of U.S. and Iran's crude oil exports (in 1000 barrels/day)
Coming at a greater cost
While Iran's crude oil exports to India, at Rs 35,395 per tonne, were relatively cheap in 2018-19, the U.S.'s crude exports, at Rs 39,843, were among the most expensive. On Monday, May 6, US Secretary of Commerce Wilbur Ross said that his country cannot ensure sale of oil to India at cheaper rates to compensate for Iranian oil. The graph shows the cost per tonne of crude oil from major countries.
How much India pays for crude oil (Rs per tonne)
Crude from the U.S.
The United States's exports to some to some of the world's largest oil consumers, including India, Japan, South Korea, and Italy have increased significantly over time. These countries are among the largest beneficiaries of crude oil from Iran.
U.S.'s crude exports to other countries (1000 barrels/day)
