India to Halve Iran Oil Imports

India to Halve Iran Oil ImportsIndia to Halve Iran Oil Imports

Indian refiners will cut their monthly crude loadings from Iran for September and October by nearly half from earlier this year, as New Delhi works to win waivers on the oil export sanctions Washington plans to reimpose on Tehran in November. According to Reuters, India’s loadings from Iran for this month and next will drop to less than 12 million barrels each, after purchases over April-August had been boosted in anticipation of the reductions.

The United States is renewing sanctions on Iran after withdrawing from a nuclear deal forged in 2015 between Tehran and world powers. Washington reimposed some of the financial sanctions from Aug. 6, while those affecting Iran’s petroleum sector will come into force from Nov. 4.

India, Iran’s No.2 oil client behind top buyer China, does not recognize the reimposed US sanctions, but winning a waiver from the restrictions is a must for New Delhi to protect its wider exposure to the US financial system.

India’s oil ministry in June told refiners to prepare for a “drastic reduction or zero” imports from Iran from November.

“Some refiners have either already exhausted or front-loaded their term contract to a large extent, which allows them the flexibility to go to zero if required, or until clarity on the waivers emerge,” Amrita Sen, chief oil analyst at Energy Aspect, told Reuters.

Washington will consider waivers for Iranian oil buyers such as India but they must eventually halt crude imports from Tehran, US Secretary of State Mike Pompeo said last week in New Delhi after a meeting of high-level officials.

The Indian government, already facing a backlash over a falling rupee and record high fuel prices, does not want to halt oil imports from Iran, as the Islamic Republic offers a discount on oil sales to India.

Government sources said India made this point clear in last week’s meetings with US officials and remains engaged with Washington to work out waivers on its oil purchases from Iran.


Add new comment

Read our comment policy before posting your viewpoints