New Delhi: India has asked its refiners to slash oil buys from Iran in the next two months to keep the imports in line with the previous fiscal year’s levels, sources with knowledge of the matter said, days ahead of President Barack Obama’s visit to New Delhi.
India, the second-largest buyer of Iranian oil, has raised its crude shipments from there by more than 40 per cent over the first nine months of the current fiscal year, when as part of the temporary deal that eased some sanctions on Tehran it was meant to hold them steady.
Now, the sources said, India’s oil ministry has told Essar Oil, Mangalore Refinery and Petrochemicals Ltd and Indian Oil Corp — the Indian refiners that buy from Iran — to cut those imports.
“This is very much about US pressure. India does not want Obama’s visit to be overshadowed by some dispute over sanctions,” said Robin Mills, head of consulting at Dubai-based Manaar Energy.
“India is encouraging its companies to cut back on imports because the US demand has been that countries taking Iranian oil should not increase purchases from 2013 levels,” he said.
Still, India’s imports from Iran rose to 250,200 barrels per day (bpd) in April-December last year, up 41 per cent compared with the same period in 2013, according to tanker arrival data made available to Reuters.
China, Tehran’s biggest oil client, has also increased its oil imports from Iran over the last year by about 30 per cent.
But with reduced purchases from Japan and South Korea — the other main buyers of the oil — Iran’s exports to Asia are holding around 1 million to 1.1 million bpd.
That’s about half of Tehran’s total exports before toughened sanctions aimed at its nuclear activities were put in place in 2012, and a level US officials have said is allowed under the temporary deals that have eased some of the measures and given Iran access to some of its frozen oil revenues.
Iran and six major world powers are due to meet next month to narrow differences over Tehran’s nuclear programme after making limited progress earlier in January to clinch a more permanent agreement by a June 30 deadline.
