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India’s Iran Oil Imports Drop to 18-Month Low

India is looking to diversify its sources of crude.India is looking to diversify its sources of crude.

India imported 335,400 barrels per day of oil from Iran in August, the lowest level since February 2016, posting a fall of about 42% from a year ago, according to ship tracking data obtained from industry sources and data compiled by Thomson Reuters Oil Research & Forecasts.

August imports from Iran were down 19.2% compared with July, the data showed, as the world's third largest oil importer is reducing intake of Iranian oil in retaliation to Tehran's decision to award a giant gas field to a Russian company, Economic Times reported.

Experts say reducing imports from Iran amid an OPEC-led supply cut aimed at propping up the market exposes India's refiners to the risk of struggling to find reasonably priced alternatives.

But the world’s third-largest consumer of the commodity is now looking to diversify its sources of crude, as US and Canadian crude become more competitive after an overhaul at Indian refineries that made heavier crude blends a new favorite since they are cheaper than lighter ones.

India's oil imports in August declined 5.3% from a year ago to 4.05 million bpd, the data showed.

During the month, imports from Latin America and Central Asia, including Russia, surged from a year ago, making up for reduced purchases from the Middle East and Asia. Purchases from Africa were largely flat, the data showed.

Iraq continued to top Indian oil purchases for the fifth month in a row followed by Saudi Arabia.

Venezuela emerged as the third biggest supplier, sending Nigeria to fifth position. Iran continued to hold the fourth rank.

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