Economy

India may continue to import oil from Iran, says Petroleum Minister

India may continue to import oil from Iran, says Petroleum Minister”

India would lift 9 million barrels of Iranian oil in November, equivalent to about 300,0000 barrels per day (bpd), compared to an average of about 658,000 bpd from April to August, according to data available with Reuters.

The Trump administration is pushing on all buyers of Iranian oil to cut imports to zero.

The United States plans to impose new sanctions targeting Iran's oil sector on November 4, however a USA government official said the Trump administration is "in the midst of an internal process" of considering waivers for countries that are reducing imports of Iranian crude.

She said the sanctions that would come into force on 4 November were created to bring Tehran to book and not to penalise India, which meets 83% of its crude oil requirements from outside.

"Obviously, all countries in the Persian Gulf region want to sell their oil, and the world is in need of this region's oil and other energy resources", the top Iranian diplomat said.

"The US government's tough stance raised the stakes for a more significant Iran export loss than previously foreseen", said Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer.

The Indian orders have reportedly been placed by Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL). An industry source who also tracks exports said October shipments were so far below 1 million bpd.

The news of India's continued importation of Iranian crude had a positive effect on oil prices, with Brent crude down 1.6% to $82.79 at the time of writing on Monday morning. Global crude oil prices had reached a record high of $147 per barrel in July 2009. Also, subsidised domestic cooking gas prices have been increased by Rs 2.89 per 14.2 kg cylinder to Rs 502.40, an all-time high.

Russia has already reversed all 300,000 bpd cuts it had pledged in the deal with OPEC, and added another 100,000 bpd production in September, Russian Energy Minister Alexander Novak said last week, but noted that in a very nervous and emotional market with a lot of uncertainties, he can't rule out oil prices hitting $100 a barrel. Additionally, the state-owned oil marketing companies have been mandated to reduce prices of petrol and diesel by Re 1 a litre. "The basic point is that they are all government companies", Pradhan said, according to The Hindu.

In the run-up to 2019 general elections, Fitch Ratings recently raised the spectre of return of state control on fuel pricing in India.



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