Oil Exports to India Jump in April

Oil Exports to India Jump in AprilOil Exports to India Jump in April

India shipped in more than 17 percent more Iranian oil in April than a year before, buoyed by prospects of a diplomatic deal on Iran's disputed nuclear program by end-June, preliminary data from trade sources and compiled by Thomson Reuters Oil Analytics showed.

Six Iranian vessels with about 264,000 barrels per day (bpd) of oil were received in April, the first month of the contract year, the data showed, and two more ships will reach Indian ports by the weekend. The eight cargoes were loaded with an average 316,000 bpd of Iranian oil.

The shipments from Iran in April are the highest since January. Last year in April, India received about 225,000 bpd. Indian Oil Corp (IOC), the country's biggest refiner, received Iranian oil in April after a gap of three months.

IOC is not a regular buyer of Iranian oil as it has a small import deal with Tehran compared to Essar Oil and Mangalore Refinery and Petrochemicals Ltd.

Imports of Iranian oil in January-April 2015 more than halved to about 220,000 bpd, as New Delhi curbed purchases in the first quarter under pressure from Washington. India, Iran's second biggest oil client after China, skipped purchases of Iranian oil in March for the first time in at least a decade.

Total Asian imports of Iranian crude fell 9.2 percent in March from a year before. However, Iran oil exports could have risen by half a million barrels in April to 1.18 million bpd now that a nuclear deal is in sight. Iran, once OPEC's second-largest producer after Saudi Arabia, hopes to boost crude exports by as much as 1 million barrels per day (bpd) if Tehran and six major powers finalize an agreement by the June 30 deadline.

Iran's crude oil exports have risen by around 500,000 bpd in April to 1.18 million bpd, helped by firmer sales to India, which bought no Iranian crude last month, Reuters quoted one source, who tracks tanker movements, as saying last week. "It's the exports to Japan and India, which have meant slightly higher Iranian exports in April even though China took slightly less," the source said.

"The 'agreed framework' has already led to an increase in Iranian oil exports as buyers take advantage of a more lax sanctions enforcement environment," said Mark Dubowitz of the US Foundation for Defense of Democracies (FDD).

The US imposed an array of sanctions on Iran to curb the country's nuclear program, but Iran insists that its program is not aimed at developing weapons. Under an earlier interim agreement, Iran's exports should average 1 million bpd. Nevertheless, since 2013 exports have frequently been above that level.

Iran and the P5+1 (five permanent members of UN Security Council, namely Britain, China, France, Russia, the US plus Germany) are negotiating to reach a final agreement.