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JUL 07 2012

India cuts June Iran oil imports 18% year-on-year

  • Economic Times, ET Bureau / Hyderabad
  • Created: Sat 07th JUL 2012

India's oil imports from Iran fell 18.2 percent in June from a year earlier in a third straight monthly decline, although the pace slowed as refiners built stocks ahead of Western sanctions against Tehran's nuclear programme that took effect by July.

The sanctions are designed to restrict the flow of funds to Iran because the West believes the Islamic Republic is trying to build nuclear weapons, but Tehran says its nuclear program is for civilian purposes.

India, one of the biggest buyers of crude from OPEC's second largest producer, last month secured a waiver from U.S. sanctions by reducing imports by more than 20 percent.

In June, refiners imported about 346,600 barrels per day (bpd) of Iranian oil, up 42.5 percent from May, tanker discharge data made available to Reuters showed.

Monthly imports from Iran may fall 13 percent to 300,650 bpd in July, when the OPEC member's daily oil exports could decline to a maximum of 1.1 million bpd, about half of the 2011 average, industry sources told Reuters.

In April and May India imported about 40 percent less oil from Iran than in corresponding period a year earlier.

IRAN PUSHED TO FIFTH POSITION Energy-hungry India, which imports about 80 percent of its oil needs, has allowed state refiners to buy oil using Iranian ships and insurance cover to lock in supplies from its third biggest source for a period of six months.

Falling imports have pushed Iran down to fifth position in the list of India's biggest crude oil suppliers in the second quarter, compared with the third position it enjoyed a year ago and second in the first quarter of 2011.

In the January-June period, India's oil imports from Iran rose 4 percent to 367,800 bpd form a year ago, the data showed.

Refiners are expected to cut volumes by more than 20 percent under the term deals they started inking on April 1, according to Reuters' calculations, while the government says it aims for imports to be down 11 percent from 2011/12, to about 310,000 bpd.

India is making up for the shortfall in Iranian cargoes by raising imports from the world's largest exporter, Saudi Arabia, and fellow OPEC member Iraq, which emerged as the second biggest oil supplier to New Delhi, replacing Tehran.

Tags

Delhi Iraq Energy United States Saudi Arabia Organization of Petroleum Exporting Countries Iran

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