The prospects of Indian refiners cutting their intake of Iranian crude oil to zero are unrealistic, the chairman of Indian Oil Corp. told S&P Global Platts in an exclusive interview this week.
Although the company, the largest oil player in India, has reduced its imports of Iranian crude, Sanjiv Singh said the chances of cutting all the way to zero are pretty slim, adding that the company had booked Iranian oil cargos for delivery this month despite the fact sanctions come into effect next Monday.
“We strongly believe that if Iran goes out of the global market it will destabilize the market — at least for some time. Personally, I don’t think India can afford zero Iran supplies,” Singh told S&P Global Platts.
The executive went on to say that IOC had reduced its imports of Iranian crude “slightly” beginning in October as Washington considers a waiver for India from the sanctions. In fact, the Economic Times, an Indian daily, yesterday reported, citing a source in the know, that the waiver had already been granted on the condition that Indian refiners reduce their combined imports of Iranian crude by 35 percent in fiscal 2018/19 from the previous year.
S&P Global Platts reports Iranian crude shipments to Indian refiners hit 600,000 bpd in September before declining to 500,000 bpd in October, a level expected to be maintained this month as well.
At the same time, imports from the United States had also risen significantly earlier this year, after President Trump announced the sanctions for the first time. In May, S&P Global Platts reported, U.S. exports of crude to India averaged 152,000 bpd, up from 29,000 bpd for January to April, and this jumped further to 261,000 bpd in June. Afterwards, however, shipments began to decline mostly on the back of the higher price of U.S. crude, according to Singh.