NEW DELHI: India’s imports of Iranian oil shot up in August to more than four times the volume taken in July as one refiner resumed purchases after a four-month break, but the average annual pace of shipments is still far below last year’s levels.
India’s intake of Iranian oil to date in 2013 is down over 40 percent on the year because international sanctions aimed at curbing Tehran’s nuclear programme have made it difficult to insure refineries and ships involved in the trade and forced some oil payments to be made in rupee.
Even though Indian oil minister M Veerappa Moily says he wants Iranian oil imports near last fiscal year’s rate of 260,000 barrels per day (bpd) — which he says would save $8.5bn in foreign exchange and help curtail India’s current account deficit — daily shipment rates are much lower than that.
Industry sources also said there would likely be no great import resurgence despite the government putting together a new reinsurance package for refineries processing Iranian oil.
India imported 151,000bpd of Iranian crude in August versus 35,500bpd in July, when only Essar Oil bought from Tehran, data compiled by Reuters from trade sources shows.
Iranian oil imports in August were about a fifth less than last year’s 192,000bpd, the tanker arrival data shows. Imports for January-August dropped about 44 percent from a year ago.
Other data provided by industry sources and Reuters calculations indicated that Indian imports from Iran will run about 190,000bpd in the year to end-March 2014.
The US and EU sanctions aimed at forcing Tehran to negotiate an end to its nuclear programme have more than halved its oil exports from about 2.2 million bpd and cost it billions of dollars a month in lost oil revenue.
Western powers believe Iran is developing nuclear weapons, while Iran says its programme is for power generation.
US President Barack Obama may meet with Iranian President Hassan Rouhani next week after a “change in tone” between Iran and the West since Rouhani took office.
Only two refiners — Essar Oil and state-owned Mangalore Refinery and Petrochemical Ltd — bought Iranian oil in August.
MRPL, which used to be Iran’s top Indian client, bought its first oil from the sanctions-hit nation since April, the data shows. MRPL resumed the imports after securing local reinsurance for claims up to Rs5bn ($79m).
In addition, India is planning to provide a Rs10bn sovereign guarantee to back local insurance for refineries using Iranian oil, according to government sources.
Reuters
