The prospects of Indian refiners cutting their intake of Iranian crude oil to zero are unrealistic, the chairman of Indian Oil Corp. told S&P Global Platts in an exclusive interview this week.
Although the company,
the largest oil player in India, has reduced its imports of Iranian crude,
Sanjiv Singh said the chances of cutting all the way to zero are pretty slim,
adding that the company had booked Iranian oil cargos for delivery this month
despite the fact sanctions come into effect next Monday.
"We strongly
believe that if Iran goes out of the global market it will destabilize the
market -- at least for some time. Personally, I don't think India can afford
zero Iran supplies," Singh told S&P Global Platts.
The executive went on to say that IOC had reduced its imports of
Iranian crude “slightly” beginning in October as Washington considers a waiver
for India from the sanctions. In fact, the Economic Times, an Indian daily reported, citing a source in
the know, that the waiver had already been granted on the condition that Indian
refiners reduce their combined imports of Iranian crude by 35 percent in fiscal
2018/19 from the previous year.
S&P Global Platts
reports Iranian crude shipments to Indian refiners hit 600,000 bpd in September
before declining to 500,000 bpd in October, a level expected to be maintained
this month as well.
At the same time, imports from the United States had also risen significantly
earlier this year, after President Trump announced the sanctions for the first
time. In May, S&P Global Platts reported, U.S. exports of crude to India
averaged 152,000 bpd, up from 29,000 bpd for January to April, and this jumped
further to 261,000 bpd in June. Afterwards, however, shipments began to decline
mostly on the back of the higher price of U.S. crude, according to Singh.