Indian Oil Companies Unenthusiastic About Boosting Oil Imports from Iran

Indian oil marketing companies are hesitant to increase their share of oil imports from Iran despite the country lifting sanctions, citing quality issues and uncompetitive pricing. Indian Oil Corporation's Director of Finance, A K Sharma, highlighted that Iranian oil is ranked near the bottom in terms of quality and prices do not make sense for increased imports. Sharma added that the company plans to increase crude imports from neighboring Iraq, where it gets the best quality grade crude, up to 18 million tons.

Key Takeaways:

• Indian Oil Corporation is not keen on increasing oil imports from Iran unless Iranian oil companies offer huge discounts under renegotiated deals.
• Iranian oil is ranked near the bottom in terms of quality, making it uncompetitive for importation.
• Reliance Industries, the operator of the world's largest refinery at Jamnagar, is waiting for the market to evolve post-sanctions before deciding on a future course of action regarding crude imports from Iran.
• Essar Oil, India's key client in Iran, is not planning to increase crude sourcing from the country as part of its strategy to include diverse crude oil markets.
• The three Indian refiners (Indian Oil Corporation, Essar Oil Corporation, and Mangalore Refinery and Petrochemicals Limited) together imported 2.61 lakh barrels per day in the first six months of the fiscal year, a slight increase from 2.23 lakh bpd in the previous year.
• B Ashok, Chairman and Managing Director of IOC, informed that the company has submitted a bid to increase procurement of crude oil from Nigeria, aiming to acquire up to 5 million tons per annum crude oil from the African nation.
• Nigeria has replaced Saudi Arabia as the largest crude oil supplier to India, with oil exports to India surging by nearly 200 per cent, supplying 7,45,000 barrels per day in the recently concluded month.

Statistics:

• 80% of India's crude needs are met through imports.
• The Indian oil firms have paid $700 million on September 30 as dues to Iran and have cleared over a fifth of the $6.5 billion outstanding owed to the Gulf country for oil supplied.
• Oil imports from Nigeria surged by nearly 200 per cent in the recently concluded month, supplying 7,45,000 barrels per day.
• IOC is planning to increase crude imports from Iraq up to 18 million tons.
• The refiners had paid a total of $700 million on September 30 as dues to Iran.

Sources:

• New Indian Express