NEW DELHI: Only one Indian buyer of Iranian oil has taken up Saudi Arabia's offer of extra oil to make up for the loss of supplies from Tehran because of US sanctions, taking an additional 2 million barrels from the Kingdom for June cargo, trade sources stated.
Last month, Saudi Arabia approached Indian buyers offering them further supplies to compensate for loss of Iranian oil after the United States threatened to sanction entities buying oil from Tehran, the sources stated.
The United States had imposed new sanctions on Iran in November remaining year, however gave a six-month waiver to eight international locations, together with India, which allowed them to import some Iranian oil.
India was once ready to shop for about 300,000 barrels consistent with day (bpd) of Iranian oil underneath the waiver. But remaining month, Washington ended the waivers and stated buyers should prevent Iranian oil purchases or face sanctions.
Only state refiners - Indian Oil Corp, Bharat Petroleum Corp, Mangalore Refinery and Petrochemicals and Hindustan Petroleum Corp - accounting for roughly 60 percent of India's 5 million bpd refining capability had purchased oil from Iran since November.
In January-April 2019 India gained about 304,500 bpd Iranian oil.
In June, Saudi Arabia will supply an additional 250,000 tonnes (2 million barrels) of oil to Mangalore Refinery (MRPL) on best of its standard requirement of about 320,000 barrels (about 2.5 million barrels), probably the most sources aware of the matter stated.
Another supply stated MRPL may no longer elevate the extra Saudi oil because the refiner had declared power majeure and close half of its plant because of water shortages.
Mangalore Refinery declined to comment. There was once no rapid comment from IOC, HPCL, BPCL and Saudi Aramco.
"In our system, UAE and Iraq oil turned out to be better than Saudi oil," a supply at probably the most Indian refineries stated.
IOC, BPCL and HPCL have no longer placed a request for extra Saudi oil for June after the Kingdom raised reliable promoting value for Asia, the sources stated.
"Saudi OSPs for June have been very strong, so Indians may have taken extra from others at competitive rates," stated Sri Paravaikkarasu, director for Asia oil at Singapore-based consultancy FGE.
When Iran was once underneath sanctions in 2012, Saudi Arabia and Iraq had raised marketplace share in Asia. But since that time trade routes have shifted with new supplies, together with from the United States, coming on to the markets.
"Saudi will have to fill some of the void left by Iran but it will not be a one to one replacement," Paravaikkarasu stated. "Indian refiners' oil import policy is very flexible now and they are no longer relying on one or two particular producers."
Indian refiners have raised not obligatory volumes underneath annual contracts with key manufacturers in addition to checking out new grades and origins to make up for loss of Iranian oil.
Also, US crude's widening cut price to Brent has reinforced demand for US crude exports.
"India wants to diversify away from Middle East because of lots of geopolitical issues relating to the region," Paravaikkarasu stated. "The Middle East will continue to be the mainstay for Indian refiners but they would like to tap new stable areas when it comes to requirement of incremental barrels."
Last month, Saudi Arabia approached Indian buyers offering them further supplies to compensate for loss of Iranian oil after the United States threatened to sanction entities buying oil from Tehran, the sources stated.
The United States had imposed new sanctions on Iran in November remaining year, however gave a six-month waiver to eight international locations, together with India, which allowed them to import some Iranian oil.
India was once ready to shop for about 300,000 barrels consistent with day (bpd) of Iranian oil underneath the waiver. But remaining month, Washington ended the waivers and stated buyers should prevent Iranian oil purchases or face sanctions.
Only state refiners - Indian Oil Corp, Bharat Petroleum Corp, Mangalore Refinery and Petrochemicals and Hindustan Petroleum Corp - accounting for roughly 60 percent of India's 5 million bpd refining capability had purchased oil from Iran since November.
In January-April 2019 India gained about 304,500 bpd Iranian oil.
In June, Saudi Arabia will supply an additional 250,000 tonnes (2 million barrels) of oil to Mangalore Refinery (MRPL) on best of its standard requirement of about 320,000 barrels (about 2.5 million barrels), probably the most sources aware of the matter stated.
Another supply stated MRPL may no longer elevate the extra Saudi oil because the refiner had declared power majeure and close half of its plant because of water shortages.
Mangalore Refinery declined to comment. There was once no rapid comment from IOC, HPCL, BPCL and Saudi Aramco.
"In our system, UAE and Iraq oil turned out to be better than Saudi oil," a supply at probably the most Indian refineries stated.
IOC, BPCL and HPCL have no longer placed a request for extra Saudi oil for June after the Kingdom raised reliable promoting value for Asia, the sources stated.
"Saudi OSPs for June have been very strong, so Indians may have taken extra from others at competitive rates," stated Sri Paravaikkarasu, director for Asia oil at Singapore-based consultancy FGE.
When Iran was once underneath sanctions in 2012, Saudi Arabia and Iraq had raised marketplace share in Asia. But since that time trade routes have shifted with new supplies, together with from the United States, coming on to the markets.
"Saudi will have to fill some of the void left by Iran but it will not be a one to one replacement," Paravaikkarasu stated. "Indian refiners' oil import policy is very flexible now and they are no longer relying on one or two particular producers."
Indian refiners have raised not obligatory volumes underneath annual contracts with key manufacturers in addition to checking out new grades and origins to make up for loss of Iranian oil.
Also, US crude's widening cut price to Brent has reinforced demand for US crude exports.
"India wants to diversify away from Middle East because of lots of geopolitical issues relating to the region," Paravaikkarasu stated. "The Middle East will continue to be the mainstay for Indian refiners but they would like to tap new stable areas when it comes to requirement of incremental barrels."
'Only 1 Indian client of Iran takes up extra Saudi oil for June'
!['Only 1 Indian client of Iran takes up extra Saudi oil for June']()
Reviewed by Kailash
on
May 13, 2019
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