India replaces China as Iran's top oil client

Discussion in 'Economy & Infrastructure' started by nrj, Apr 12, 2012.

  1. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    NEW DELHI: India has vaulted to the top of the list of Iran's oil customers, overtaking China, in a first quarter buying surge ahead of tighter sanctions against Tehran this summer, data published by a leading industry consultant showed.

    Direct imports to India from Iran were 433,000 barrels per day (bpd) in the first quarter compared with 256,000 bpd to China, according to data compiled by Geneva's Petrologistics and seen by Reuters via an industry source.

    The Indian import figure was up by around 23 per cent from the 351,0000 bpd imported over the same period of 2011 and significantly above the its 2011 average of 326,000 bpd.

    Iran, like many oil exporters, does not publish its own oil sales data on a timely basis, but the Petrologistics figures add to signs that India has stepped up imports due to a cooling of relations between Tehran and Beijing over payment terms.

    India is also widely seen to be raising imports ahead of tighter sanctions this summer when payments, insurance and supplies are expected to be more uncertain.

    Iran traditionally sells most of its 2.2 million barrels per day of oil exports in Asia, where China, India, Japan and South Korea are the four biggest buyers, although its exports have fallen this year due to international sanctions aimed at slowing Tehran's nuclear programme.

    Industry sources said Iran's crude oil exports fell by around 300,000 bpd to 1.9 million bpd in March, with customers in Europe making deep cuts ahead of an EU embargo due to be implemented on July 1.

    Customs data showed that China's imports from Iran for February were down by 40.3 per cent from the same period in 2011. This trend was confirmed by the Petrologistics data which showed that imports were down 39.4 per cent in the first quarter versus last year.

    "China ditched some term contracts due to what they perceived as unfavourable terms and also as a bargaining ploy on prices," said a crude oil trader.

    India, openly disdainful of sanctions to pressure Tehran, has been left off a list of nations given a US waiver from the measures, but is privately pushing its refiners for substantial cuts in imports from Iran.

    On a monthly basis, India's crude purchases from Iran have fallen steadily from a January's 531,000 bpd when it first overtook China as top importer, the data showed, suggesting that purchases of Iranian crude have already peaked.

    Petrologistics, one of several consultants estimating oil exports by tracking tanker shipments, showed that India imported 404,000 bpd in February and 363,000 bpd in March.

    Reuters shipping data showed a similar trend and in February India imported about seven per cent less Iranian crude. Many expect lower volumes when new contracts begin in April.

    The top Indian oil importer in the first quarter was Essar Oil, buying 142,000 bpd compared with 88,000 bpd in the first quarter of 2011, the Petrologistics data showed.

    Essar plans to expand its refining capacity and will raise the capacity of its giant Vadinar refinery to 405,000 bpd this year.

    Historically, Iran's biggest Indian oil client was Mangalore Refinery and Petrochemicals Ltd (MRPL), which bought 110,000 in the first quarter, down from 162,0000 bpd in 2011, the data showed.

    Indian Oil Corp stepped up imports to 85,000 bpd from just 11,000 bpd in the same quarter of 2011, it showed.

    India replaces China as Iran's top oil client - The Times of India
     
    Last edited: Apr 12, 2012
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    One wonders how the US will view that!

    What would be the repercussion, if any and how will that affect India, if it does!
     
  4. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Indians aren't cutting down Iranian imports & we increased imports by 23%.

    When India threw out American fighters from MMRCA, there was quick reaction from US and Elta-2052 sharing with Israel was barred.

    So far Indians are doing well by routing payments from nationalized banks which are not much exposed to western sanctions.

    Does this mean US is not serious about Iran ? And New Delhi knows about this or they are communicated privately ?
     
    Last edited: Apr 12, 2012
  5. trackwhack

    trackwhack Tihar Jail Banned

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    Awesome news.
     
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  6. Yusuf

    Yusuf GUARDIAN Administrator

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    Are we getting that oil at a substantially lower price. We should not be paying market price.
     
  7. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    UPDATE 1-India replaces China as Iran's top oil client | Metals & Mining | Reuters
     
  8. mylegend

    mylegend Regular Member

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    According to Financial Times, Iran did provide discount for few selected Asian buyer "Tehran has been offering a handful of potential customers in Asia, including India, 180 days of free credit, according to the officials. They estimate that each month of credit amounts to a discount of roughly $1.2 to $1.5 a barrel."

    "Iran's offer of longer payment periods amounts to a discount of about 7.5 per cent per $118 barrel. Saudi Arabia and other leading Middle East oil producers extend 30 days of credit, and Tehran in the past has allowed importers such as China to pay in 60 to 90 days."

    http://edition.cnn.com/2012/04/11/business/iran-skirts-sanctions/index.html

    For those who have FT account, view this news in FT site instead of CNN...

    http://www.ft.com/cms/s/4c2f37f6-83..._referer=http://www.ft.com/world/mideast/iran
     
    Last edited: Apr 13, 2012
  9. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    The most important part of the report is the above quote. From the peak of 531,000 bpd in January to 363,000 bpd in March, there has been a clear decline of over 30% which goes way beyond to what was committed to the US, and this figure is set to go below the 300,000 bpd mark in the coming months.

    India and China might continue to be the largest importers of the Iranian crude oil, but the volume of export is definitely on the decline, and the trend will continue till June at least.
     
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  10. sob

    sob Moderator Moderator

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    Ritesh,

    Good of you to spot the fine line in the print. Headlines from TOI are often just headlines, without any substantive news and only meant to sensationalize.

    This just shows that India is being a responsible member of the international community and is contributing it's 2 bits to bring Iran to the negotiating table.
     
  11. ajay_ijn

    ajay_ijn Regular Member

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    I don't understand Is US going to find us another oil seller selling to India at same price? or will US themselves sell crude oil to India? if lose money by buying elsewhere, how will US compensate us?
     
  12. sob

    sob Moderator Moderator

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    KSA is ready to step into the breach. But it has been the stated policy of India, and rightly so-- not to put all eggs in one basket
     
  13. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Alternative supply lines are being worked out in Africa and Latin America. KSA is a temporary alternative. There was a news that we have been offered stake in Iraq oil fields by the US, though not sure how authentic the report was.

    Iran is important to us not so much for energy needs, but:

    As a route to CAR and Afghanistan.
    As partner nation once the NATO leaves Afghanistan.
    An important nation in the region which neighbours Pakistan, and with which we have cordial relations.

    Had it been only for the energy needs, we would have long abandoned Iran.

    @ topic,

    We have long committed on oil cuts, if I am not mistaken, it was a done deal sometime in Nov-Dec, and the implementation started from this year onwards. It isnt the Americans who are making the "noise", but the Israelis.
     
  14. nrj

    nrj Stars and Ambassadors Stars and Ambassadors

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    Yes I realized that after posting reuters article :D

    TOI news in OP tells only half of the story.

    Monthly imports are declining since January.
     
    Last edited: Apr 13, 2012

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