As refiners boosted purchases after lifting of some Western sanctions against Iran last year, India‘s Iran oil imports jumped to a record high in 2016/2017 topping half-a-million bpd. After China, India is Iran‘s biggest oil buyer. Despite Western sanctions over its nuclear program, India was among a handful of countries that continued to deal with Iran.
In the fiscal year to March, refiners shipped in about 541,000 bpd of Iranian oil. Over the previous year, this marks a growth of about 115 percent. Iran was India‘s second-biggest oil supplier – a position now belonging to Iraq – before economic sanctions aimed at Iran‘s nuclear program hampered its trade relations, forcing the South Asian nation to tap alternative suppliers.
Iran regains some of the lost market shares due to purchases by Indian refiners. As state-refiners have agreed to cut by 20 percent their annual imports deal with Iran, imports from Iran could ease in this fiscal year.
Meanwhile, Iran has decided to cut freight discounts from 80 percent to 60 percent and cut the credit period on oil sales to 60 days from 90 days. Due to some OPEC producers had cut supplies, India‘s oil imports from Iran in January-March this year surged by about 92 percent to 573,400 bpd.
Iran was not subject to an output cut by 1.2 million bpd starting January 1 under OPEC deal. It’s a victory for the country which argued it needs to regain the market share it lost during sanctions.
Earlier this week, Iranian Oil Minister Bijan Zangeneh said India was one of Iran’s good customers, but it cannot sign a contract under threat.
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