Rocked by Trump's Sanctions, Iranian Oil Exports Drops Further

Daniel Fowler
October 9, 2018

India hopes to secure a waiver from U.S. sanctions on Iran before they take effect on November 4, as it had significantly cut Iranian oil imports before the deadline, officials said on Monday.

Pradhan said two state refineries have made nominations to purchase Iranian oil in November.

The announcement, the first indication Washington was considering such waivers, followed a Reuters report that India planned to lift some Iranian oil in November although it has been cutting back on Iranian imports recent months.

U.S. president Donald Trump is reported to be "actively considering waivers" on sanctions on Iranian oil imports for some countries ahead of the November deadline.

"India is continuing with its relationship with both its key energy partners Iran and the U.S.", a second source said.

This is the first public statement made by the Government on its stand on sourcing Iranian oil once the United States sanction on Iran pertaining to the oil industry comes into force.

The news of India's continued importation of Iranian crude had a positive effect on oil prices, with Brent crude down 1.6% to $82.79 at the time of writing on Monday morning. Of the 220.4 million metric tonnes (million MT) of crude oil imported by India in 2017-18, about 9.4% was from Iran.

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Pradhan reportedly said Monday that India does not know if it would get a waiver from the U.S. An industry source who also tracks exports said October shipments were so far below 1 million bpd.

Separately Saudi Crown Prince Muhammad Bin Salman has said that the kingdom has met the promise of filling up any shortfall the oil markets faced on Iran oil going out of it due to sanctions.

Delhi is hopeful that Saudi Arabia and other members of the Organization of Petroleum Exporting Countries will heed U.S. calls for production to be boosted by one million barrels per day, as promised in June, which might help bring benchmark prices down.

India is the world's third-largest oil importer, and Iran's second-biggest oil customer after China. To this, taxes at the central and state levels are added, besides dealers' commission, to arrive at the retail price.

Russia has already reversed all 300,000 bpd cuts it had pledged in the deal with OPEC, and added another 100,000 bpd production in September, Russian Energy Minister Alexander Novak said last week, but noted that in a very nervous and emotional market with a lot of uncertainties, he can't rule out oil prices hitting $100 a barrel.

"Oil should not only be priced from a producers' point of view consumers interest should also be taken care of", he said.

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