India’s Oil-Prepared: US Sanctions On Iran May Cause Shortfall, Companies Ensure Supply From Saudi Arabia And Iraq

There is a shortfall in oil imports from Iran owing to US sanctions, and to overcome this, few Oil Companies in India have ensured oil supply from Saudi and Iraq, reported The Times of India.

US sanctions are likely to kick-in by November this year. India is 80 per cent dependent on imports, out of which Iran accounts for 10 per cent.

Oil majors in India such as Reliance Industries Limited, Indian Oil Corporation, Bharat Petroleum Corporation and Mangalore Refinery Petrochemicals Limited have reportedly sought one million barrels from Saudi Arabia.

Reports also suggest that officials in New Delhi are not worried even if oil imports from Iran stop completely. However, the government is supposedly working on possible measures to ensure an uninterrupted relationship with a traditional ally.

Earlier, we had reported that India is working on an alternative payment mechanism for Iran oil imports employing UCO Bank or IDBI bank.

However, interestingly, in the hope of US sanctions being waived-off, the actual oil imports from Iran may be far lesser than the contracted imports. Reliance Industries Ltd has stopped buying oil from Iran and other oil companies are also scaling down.

The US Secretary of State Mike Pompeo had earlier hinted at a sanction waiver but made it clear that it would be in a time-limited way.

Sourcing from Iran increased to 12.7 million tonnes in 2015-2016, while giving it the sixth spot, however supplies jumped to 27.2 million tonnes to don the third spot.