India will break U.S. sanctions and keep importing Iranian oil

Marco Green
October 9, 2018

Ralph Leszczynski, Banchero Costa's head of research in Singapore, tells TradeWinds: " The US sanctions on Iranian oil imports are strictly unilateral, as they have been actively resisted by other buyers of Iranian oil. Of the 220.4 million metric tonnes (million MT) of crude oil imported by India in 2017-18, about 9.4% was from Iran.

Top US officials are said to remain divided over whether they should save Iran's access to global financial markets ahead of November U-S sanctions.

India is Iran's second-largest single oil customer after China and was expected to cut back on Iranian oil purchases following USA sanctions.

Currently, India heavily relies on Iran for crude oil imports.

Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, as buyers are seeking alternatives ahead of the start of the USA sanctions on November 4 and creating a challenge to other OPEC oil producers as they seek to cover the shortfall.

"Two of our oil companies have made nominations to purchase Iranian oil in November", he said speaking at The Energy Forum.

The government was discussing its options to buy Iranian oil with all authorities, Pradhan said.

Russian Federation and China are both pursuing their own systems and Germany has suggested creating Europe's rival to global financial messaging service SWIFT based on the euro rather than the dollar in order to bypass USA sanctions. Top officials at the US Treasury Department also pushed for Tehran to remain connected with SWIFT.

According to the report, France, Germany and the United Kingdom are frustrated with the Trump administration's hard line on the matter.

DUBAI - Iran's Oil Minister Bijan Zanganeh has dismissed claims by the Saudi crown prince that Saudi Arabia can replace sanctions-hit Iranian oil in the market as "nonsense".

The Islamic Republic exported 1.1 million barrels per day (bpd) of crude in that seven-day period, Refinitiv Eikon data showed.

"Iranian barrels are declining fast, and Saudi Arabia's promise to balance will face a reality check in a month's time", JP Morgan said in a note.

Pradhan said he had spoken to Saudi Oil Minister Khalid al-Falih two day earlier about the June decision by OPEC and major oil producers to add 1 million bpd to the oil market.

"However it would come at a cost, both in terms of higher oil prices compared to the favourable terms it gets from Iran and in terms of higher shipping costs as they would inevitably be longer distance shipments compared to Iranian exports". Then there's uncertainty about how much spare capacity Iran's fellow OPEC members and non-OPEC Russia could summon on short notice to replace Iranian losses.

Other reports by Click Lancashire

Discuss This Article