ibusinesslines.com
ibusinesslines.com October 21, 2018


India defies USA, buying Iranian oil despite sanctions

10 October 2018, 08:56 | Kelvin Horton

India would continue its energy imports from Iran even in the wake of the USA government's 4 November deadline, hinted petroleum minister Dharmendra Pradhan on Monday.

"Refiners have placed November nominations to lift 1.25 million tonnes (about 9 million barrels) of oil from Iran", a source has told Reuters.

Reuters said that Indian Oil would buy six million barrels of oil and Mangalore Refinery and Petrochemicals three million barrels.

President Donald Trump has said the Iran oil sanctions are meant to isolate the regime in that country and force them to negotiate a new nuclear deal.

Later, talking to reporters, he said India has its own energy requirements which it has to fulfill.

Pradhan reportedly said Monday that India does not know if it would get a waiver from the U.S.

In the previous round of sanctions from 2012 to 2015, India continued to buy Iranian crude although it had to cut purchases significantly to protect its wider exposure to the USA financial system.

"Iranian barrels are declining fast, and Saudi Arabia's promise to balance will face a reality check in a month's time", JP Morgan analysts said in a note.


The minister's comments come before the U.S. sanctions on Iran kick in from November 4.

India is the world's third-largest oil importer, and Iran's second-biggest oil customer after China.

Last week, India reduced gasoline and diesel prices to give relief to consumers against rising global crude prices caused by uncertainty over USA sanctions on Iran and OPEC's decision to raise output. Since the start of September, prices had spiked by over 10 per cent reaching a four-year high despite the fact that at the Algiers meeting last month OPEC had declared that the market was comfortably supplied. An industry source also said October shipments were so far below 1 million bpd.

White House National Security Advisor John Bolton said only last week that the administration wanted to avoid all waivers and see Iranian oil and gas exports entirely staunched, but that it might not be able to achieve that aim. Even in the case of Iran there is an expectation that its oil exports may fall less sharply than feared, while Libya's oil production has stated to rise.

U.S. West Texas Intermediate and worldwide benchmark Brent crude oil futures are trading higher early Tuesday, continuing to recover from Monday's early session setback.

On Monday, petrol and diesel were selling at Rs 82.03 per litre and Rs 73.82 per litre, respectively, in New Delhi.

In the run-up to 2019 general elections, Fitch Ratings recently raised the spectre of return of state control on fuel pricing in India. However, he added that state-run oil companies must look beyond their profits to easing the burden on consumers.



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