New Delhi: India’s imports of oil from Iran rose 3.7% in January from December, but overall purchases fell 21.8% in the first 10 months, data from trade officials shows, as New Delhi cut dependence on Tehran under the pressure of sanctions.
European Union and US sanctions aimed at forcing Iran to curb its disputed nuclear programme have more than halved Iran’s oil exports in 2012. The West believes Tehran’s nuclear programme is aimed at making a bomb, but Iran denies this claim.
Iran’s major Asian clients—China, India, Japan and South Korea—have all cut imports heavily to secure waivers and continued access to the US financial system.
New Delhi, Tehran’s top oil client after China, has reduced Iran’s role as a supplier, so that it contributed about 7.4% of all imports in the period from last April to January, compared to 10.7% a year earlier.
India is now paying Iran only in rupees for its oil after it lost another payment route in euros through Turkey’s Halkbank after the US toughened sanctions from 6 February, people familiar with the matter said.
India plans to reduce imports from Iran by another 10 to 15% in the next contract year starting 1 April, and more if Tehran does not lower prices to help cover costs resulting from Western sanctions, these people have said.
Indian oil firms are constantly diversifying their crude basket to eliminate dependence on any particular country or region, oil minister of state Panabaka Lakshmi told lawmakers on Friday.
New Delhi shipped in about 286,400 barrels per day (bpd) of oil from Iran in January, a decline of 41.2% from around 486,600 bpd of a year ago, the data showed.
Refiners adjust crude purchases from month to month to tweak their product slate as they try to maximise profit margins.
State-run Hindustan Petroleum Corp. Ltd may have to halt Iranian oil imports from June as sanctions could mean its refineries cannot renew insurance to process the crude. It boosted purchases from Iraq to make up for the loss of Iranian barrels.
India, the world’s fourth biggest oil importer, shipped in about 272,300 bpd oil from Iran in the period from April to January, the data showed, below the government’s target of 310,000 bpd for this fiscal year ending 31 March.
Iran’s share of India’s total imports was about 362,000 bpd in the year to March 2012, from about 16.4% or 436,000 bpd in the year to March 2009, taking it to third place among suppliers. It was replaced by Iraq after five years in the No. 2 slot.
In the period from April 2012 to January, Iran slipped further and was the sixth biggest oil supplier to India, as refiners continued making cuts in imports.
Overall, India imported about 4.1 million bpd of oil in January, up 11.5% from a year earlier, as the country expanded its refining capacity.
To replace lost Iranian volumes, India’s imports of oil from Latin America have more than doubled in the period from last April to January, with the region accounting for about 17% of overall imports, up from about 9% a year ago.
The Middle East region supplied about 61% of India’s oil imports in April-January, compared with nearly 71% a year ago. REUTERS