NEW DELHI (Reuters) - India’s Iran oil imports jumped to a record high in 2016/17 topping half-a-million barrels per day (bpd) as refiners boosted purchases after lifting of some Western sanctions against Tehran last year.
India, Iran’s biggest oil buyer after China, was among a handful of countries that continued to deal with Tehran despite Western sanctions over its nuclear programme.
Refiners shipped in about 541,000 bpd of Iranian oil in the fiscal year to March, a growth of about 115 percent over the previous year, ship tracking data obtained from sources and data compiled by Thomson Reuters Oil Research & Forecasts showed.
Iran was India’s second biggest oil supplier - a position now belonging to Iraq - before economic sanctions aimed at Iran’s nuclear programme hampered its trade relations, forcing the South Asian nation to tap alternative suppliers.
Purchases by Indian refiners, including Reliance Industries that resumed imports last year after a multi-year lay-off, helped Iran regain some of the lost market share.
Imports from Iran could ease in this fiscal year as state-refiners have agreed to cut their annual imports deal with Iran by a fifth to put pressure on Tehran to award the Farzad B gas field to an Indian consortium.
Iran, in turn has decided to cut the credit period on oil sales to 60 days from 90 days and cut freight discounts from 80 percent to 60 percent.
India imported 18.7 percent less oil from Iran in March at about 526,000 bpd oil compared to the previous month, data showed. Volumes were however 4 percent higher than a year ago.
Overall, India’s oil imports rose 4.7 percent in March from the previous month, and by about 4.9 percent from a year ago.
In March Iraq emerged as the second biggest oil supplier to India, a position it ceded to Iran the previous month. Saudi Arabia continued to be the top oil supplier to India in March.
In the first quarter of this year India’s oil imports from Iran surged by about 92 percent to 573,400 bpd as some OPEC producers had cut supplies, the data showed.
Iran was exempted from an OPEC deal to reduce output by 1.2 million bpd starting Jan. 1, a victory for Tehran which argued it needs to regain the market share it lost during sanctions.
Reporting by Nidhi Verma, editing by David Evans