Even as Iran gears up to expand its influence in global oil markets after lifting of the West imposed sanctions, Indian oil companies do not seem too keen to increase their share of oil imports from the Persian Gulf nation.
The country’s largest oil marketing company Indian Oil Corporation is not keen to increase oil imports from the Islamic country unless Iranian oil companies offer huge discounts under renegotiated deals, the New Indian Express wrote.
A K Sharma, Director, Finance of Indian Oil Corporation said that on quality index, Iranian oil is closer to bottom of the list. Moreover, the prices that Iran is offering on the grade of crude does not make sense for us to import higher quantity. Iranian oil companies would have to agree for good discounts to win larger orders from us.” PressTV reported.
Sharma further added that we are getting best quality grade crude (light crude oil) from its neighbor Basra (Iraq) and plan to increase crude imports to 18 million tons.
Similarly, Reliance Industries (RIL), which operates the world’s largest refinery at Jamnagar is not too keen to test Iran for increasing their crude imports and want to wait for the market to evolve post-sanctions before deciding on a future course of action.
Essar Oil, Iran’s key Indian client is also not looking at any significant increase in crude sourcing from that country as part of the strategy to include diverse crude oil source markets.
Three Indian refiners, Mangalore Refinery and Petrochemicals Limited, Essar Oil Corporation and Indian Oil Corporation together imported 2.61 lakh barrels per day in the first six months of this fiscal year compared with 2.23 lakh bpd a year ago, the government data showed.
B Ashok, Chairman and Managing Director of IOC also informed that the company has submitted a bid to increase procurement of crude oil from another country Nigeria. “With lower global crude prices, we are in talks with Nigeria for getting into a long term contract with more than double the capacity of import at current prices,” Ashok pointed out.
Nigeria has replaced Saudi Arabia as the largest crude oil supplier to India after its oil exports to India last month surged by nearly 200 per cent, supplying some 7,45,000 barrels per day.
India imports about 80 per cent of its crude needs and has mandated its oil firms to acquire oil and gas assets overseas in a bid to cut an oil import bill running in billions of dollars.
Ashok said that IOC was looking to source as much 5 mtpa crude oil from the African nation, up from the 1.5 mtpa it procures at present.
The Indian refiners had paid a total of $700 million on September 30 dues to Iran and have cleared more than a fifth of the $6.5 billion outstanding owed to the gulf country for oil supplied.