Published: Wed, October 10, 2018
Business | By Eloise Houston

India expected to keep buying Iranian oil despite sanctions by US

India expected to keep buying Iranian oil despite sanctions by US

However, a USA government official said on Friday that the country could consider exemptions for nations that have already shown efforts to reduce their imports of Iranian oil. Of the 220.4 million metric tonnes (million MT) of crude oil imported by India in 2017-18, about 9.4% was from Iran.

International Olympic Committee and ONGC's refining subsidiary MRPL, (Mangalore Refinery and Petrochemicals Ltd) have placed an order for 1.25 million tonnes of Iranian crude.

Iran may indeed have not cut production yet to match the rate of decline in its exports, as the country appears to be storing more oil on ships as it did during sanctions that applied until the 2015 nuclear deal.

He said: "We have to fulfil all our domestic requirements".

LONDON-Oil prices started the week under pressure, amid reports the USA could grant waivers to some buyers of Iranian crude when oil sanctions on the Islamic Republic go into effect next month.

U.S. Secretary of State Mike Pompeo said in India last month that the White House would only consider waivers for Iran's oil buyers if they vowed to eventually bring their imports to zero.

The IMF said the contraction in the Iranian economy that it now is projecting over the next two years was due to "reduced oil production" under the sanctions.

The IMF downgraded the economic growth forecasts for the whole region of the Middle East, North Africa, Afghanistan, and Pakistan, compared to the April edition of the World Economic Outlook, reflecting "to an important extent the worsening of growth prospects for Iran, following the reimposition of U.S. sanctions", the IMF said in the October outlook.

India, the world's third-largest oil importer, is a major importer of Iranian oil. USA sanctions will block payment routes.

White House National Security Advisor John Bolton said only last week that the administration wanted to avoid all waivers and see Iranian oil and gas exports entirely staunched, but that it might not be able to achieve that aim.

Oil also dropped as investors focused on rising output from other producers, such as top exporter Saudi Arabia, to compensate for lower Iranian supplies which have fallen further in October according to export data. The figure also marks a further fall from 1.6 million bpd in September.

Worldwide benchmark Brent crude traded at around $83.38 on Monday, down almost 1 percent, while U.S. West Texas Intermediate (WTI) stood at around $73.81, around 0.7 percent lower. To this, taxes at the central and state levels are added, besides dealers' commission, to arrive at the retail price.

On Monday, petrol and diesel were selling at Rs 82.03 per litre and Rs 73.82 per litre, respectively, in New Delhi. "The basic point is that they are all government companies", Pradhan said, according to The Hindu.

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