ibusinesslines.com October 16, 2018

India defies US, buying Iranian oil despite sanctions

08 October 2018, 07:10 | Kelvin Horton

India defies US, buying Iranian oil despite sanctions

India defies US, buying Iranian oil despite sanctions

The world's third-largest oil importer, India relies upon Iran for 9.4% of its crude supplies: in 2017-18 the country brought in 220.4 million metric tonnes of oil from a number of sources.

Speaking at the energy forum in New Delhi on Monday, Pradhan said India did not know whether it would receive a waiver from Washington's sanctions.

Indian refiners have already imported around ten million barrels of Iranian crude this month. According to CNBC, Pradhan said India may use rupees rather than dollars to buy the oil, in an attempt to skirt the sanctions.

President Donald Trump has pulled the USA out of a historic 2015 accord with energy-rich Iran signed to curb the Islamic republic's nuclear programme in return for ending sanctions.

The Trump administration is pushing on all buyers of Iranian oil to cut imports to zero.

LONDON-Oil prices started the week under pressure, amid reports the USA could grant waivers to some buyers of Iranian crude when oil sanctions on the Islamic Republic go into effect next month.

Oil traders initially reacted to a selloff in Chinese stocks, but as the USA stock market opened higher, "we've pulled back dramatically", said Mark Anderle, an energy trader at TAC Energy.

Oil dropped below $83 a barrel on Monday, pressured by expectations that some Iranian oil exports will keep flowing after the US reimposes sanctions, easing a strain on supplies.

Washington is pushing allies to cut imports of Iranian oil to zero and will impose a new round of sanctions on Iranian oil sales in November.

Opec accounts for around 40% of the global production.

Sri Lanka, a country closely watched by the United States is expected to raise oil prices again by Wednesday midnight under the fuel price formula in line with increasing global prices. "Iran's oil can not be replaced by Saudi Arabia".

Brent crude on Wednesday last week reached $86.74 a barrel, the highest since 2014. Oil dropped to around $83 a barrel on Monday.

None of the Iranian crude exported in the first week of October is heading for Europe, according to the Refinitiv data.

Indian Oil Corporation Chairman Sanjiv Singh said on Monday the company has recently made some payments for Iranian oil in rupees.

"In effect, the government has asked the OMCs to sell petrol and diesel at subsidized prices, for which they will not be reimbursed", the report said.

He argues that it would put in jeopardy projects such as Chabahar Port in south-eastern Iran which India sees as both an entry channel for Afghanistan and counter-balance to the nearby Chinese-built Gwadar port just across the border in south-western Pakistan.

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