Several middlemen have offered Indian refiners discounted Iranian oil as Tehran looks
to expedite sales after Washington’s temporary sanctions waiver,
Indian refining sources said.
On Monday, the United States waived sanctions on Iran for 60
days after the first talks under a nascent peace deal, opening a
narrow window for renewed energy trade.
The approaches to Indian refiners have come directly from
National Iranian Oil Co (NIOC) and through intermediaries saying
they have been allocated oil by the Iranian state producer, the
sources said.
“Apart from NIOC, several traders are contacting us for the
sale of Iranian oil. But my priority is to give a chance to
NIOC,” said one of the refining sources. The sources declined to
be named because the discussions are confidential.
NIOC is telling Indian buyers that Iranian crude would be $3
to $4 a barrel cheaper than similar regional grades on a landed
basis, they said.
NIOC did not immediately respond to a Reuters email
requesting comment due to a public holiday in Iran.
The traders approaching refiners are mainly from small and
mid-sized trading companies based in Singapore and Dubai, the
sources said, declining to name them.
Potential supplies of crude and liquefied petroleum gas
(LPG) to India were also discussed during Iranian Petroleum
Minister Mohsen Paknejad’s visit to New Delhi this week, the
sources added.
However, Indian refiners have limited scope to absorb
Iranian crude in the near term because most have already secured
supplies through August and Middle Eastern term suppliers are
pressing buyers to honour annual contractual commitments.
India had already imported Iranian LPG through traders, and
those flows could rise under the sanctions waiver, sources said.
However, commercial negotiations could take some time because
payment mechanisms and banking channels remain unclear.
India received two cargoes of Iranian oil in April after
Washington granted a 30-day sanctions waiver, with payments
settled in Chinese yuan.
Iran was India’s second-largest oil supplier in the 2010/11
financial year before U.S. sanctions pushed New Delhi to reduce
purchases and eventually halt crude imports from Tehran in May
2019.