Reuters /New Delhi
Indian refiners are increasing their planned purchases from Opec nations, Mexico and the US to make up for any loss of Iranian oil if the US enforces sanctions more harshly from next month, sources and company officials said.
All four Indian state-owned refiners that buy Iranian oil are confident of securing additional barrels from other producers, officials from the companies told Reuters.
They have not yet placed orders for Iranian oil for May, when the current waiver expires, pending clarity from the United States.
India’s Bharat Petroleum Corp (BPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) have tapped Iraq to make up for Iranian oil, while Indian Oil Corp (IOC) has signed its first annual contract with US suppliers and raised supplies from Mexico.
“The supply can come from both Opec and non-Opec nations like the US,” said M . Surana, chairman of Hindustan Petroleum Corp, which purchased up to 1.5mn tonnes per year of Iranian crude in 2018-19.
The Organization of the Petroleum Exporting Countries (Opec) and other producers including Russia have gradually tightened supply through 2019 to reduce a global glut. Opec and its partners may not renew the curbs when they expire after June because of the risk of over-tightening the market.
IOC, India’s top refiner and Iran’s biggest Indian client, will cut Iranian oil imports to 6mn tonnes, or about 120,000 barrels per day, in the 2019-20 period from 9mn in 2018-19, and has raised the optional volumes it can buy from other producers to 2mn tonnes, a company official said.
“We have optional contracts with Saudi Arabia, Kuwait and other suppliers,” the official said, adding his firm would also buy more US oil if required.
IOC also hopes to buy 1.5mn tonnes of Mexican oil in 2019, compared with 1mn tonnes last year.
A source at the state-owned National Iranian Oil Co declined to comment.
Refinery officials said their 2019-20 import strategy was not contingent on Iranian oil, and was more flexible than in previous years.
“We don’t have a watertight plan for the year, we have optional quantities so that it is possible to find replacements if any country goes out for any reason,” said an MRPL official.
During previous sanctions against Iran, Saudi Arabia and Iraq raised supplies to India to grow market share in the country, the world’s third-biggest oil consumer and importer.
Last year, MRPL signed its first annual deal with Iraq to buy 1.5mn tonnes of Basra oil in 2019.
BPCL has signed a deal to buy 5mn tonnes of Iraqi oil in 2019 compared with 1.5mn tonnes in 2018, its head of refineries R Ramachandran said, adding his company is considering buying more oil from South America. It recently bought Brazilian crude and plans to buy Mexican oil.
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