Saudi Arabia has come to the rescue for India as Iranian oil shipments have come to an absolute halt following the Unites States (US) having enacted stringent economic sanctions against the Islamic republic.
The world's largest oil company Saudi Aramco will be providing additional crude oil to domestic Indian refiners to meet the shortages arising out of the Iran sanctions. The company has offered to boost the Indian supplies by 200,000 barrels a day (bpd) which would make up for almost half of India’s oil imports from Iran, The Economic Times.
On an annualised basis, 200,000 bpd of crude oil imports would mean an additional 10 million tonne (mt) of increased oil imports from Saudi Arabia. Aramco's offers are set for deliveries starting June 2019.
In FY19, India had imported about 23.9 mt of crude oil from Iran, making it the third largest oil exporter to India after Iraq and Saudi Arabia. It must be noted here that Iran used to offer Indian refiners 60 day credit for oil deliveries and also provided discounts on freight and insurance. Saudi Arabia on the other hand charges an Asian premium for its crude oil exports to India making the Arab oil costlier.