State-run refiners Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL) are hoping the US will extend a waiver on sanctions imposed on Iran to let them continue crude oil imports from the Middle East nation, said two officials at the oil marketing companies.
Last November, the US offered a six-month waiver to eight countries, including India, allowing them to import oil from Iran until the end of March.
Under the agreed terms, the oil companies (OMCs) must restrict their purchases of Iranian oil to 1.25 million tonnes, or 9 million barrels a month. “Of course, we would want an extension of the waiver. It is absolutely worth taking Iran crude beyond April.
As compared to other crudes that we process, Iranian crude brings more value in terms of the gross refining margin," said the first official cited above, requesting anonymity.
Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries (Opec) and India is the world’s third-biggest oil importer.
India’s imports from Iran totalled about $11 billion between April and November 2018, with crude oil comprising about 90%.
BPCL and HPCL said earlier this month they will, after a gap of three months, import 1 million barrels of Iranian oil each in February and March.
Reuters reported earlier in January that IOCL, India’s top refiner, will lift 5 million barrels of Iranian oil in February, the same as this month. Mangalore Refineries and Petrochemicals Ltd (MRPL) will buy 2 million barrels, compared with 3 million barrels this month.
IOCL, BPCL and HPCL did not reply to emailed queries till press time.
“It is very difficult for any refinery to generate a differential of 70 cents only by crude processing. So, if any crude supplier is offering that differential to us, we would take it. Besides, there is free shipping, an extended credit period and they deliver the cargo to your port," said the second official quoted above.
India had imported about 22 million tonnes of crude oil from Iran in 2017-18, and had plans to raise the same to about 30 million tonnes in 2018-19.
But, with the waiver in the picture, oil companies were forced to cut imports from Iran and scout for other sources.
Another waiver will bring relief to IOCL and MRPL, two major Iranian oil consumers.