MUMBAI: Oil markets may heave a sigh of relief at last as the United States has indicated for the first time its willingness to grant waivers from sanctions on Iran oil purchase. 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.
For India, reeling under oil price hike and the burden of depreciating rupee, continued flow of Iran oil even as sanctions kick in on November 4 would be a great relief.
Global news agency Reuters reported from Washington quoting an unnamed government official saying that the administration is in the midst of an internal process to consider significant reduction exemptions (SRE) waivers. It added that the US administration is prepared to work with countries that cut Iran imports on a case by case basis.
India has been negotiating with Iran for payment for oil in rupees and two state-owned Indian refiners — Indian Oil Corporation and Mangalore Refinery and Petrochemicals Ltd — have contracted to by 1.25 million tonnes of crude oil from Iran in November, PTI reported. Oil companies have been tight lipped about Iran imports. India had planned to import 25 million tonnes of crude from Iran this year, up from 22.6 million tonnes imported last year —planned before US withdrew from the nuclear deal with Tehran.
Crude oil prices last week hit a four year high of $86/barrel mainly on fears of tightening supplies with Iran oil going out of market. Prince Muhammad was quoted by Bloomberg as having said “We export as much as two barrels for any barrel that disappeared from Iran recently … So we did our job and more”. Any stability will bring relief to Indian economy and consumers — if markets on Monday take into account the news of partial waivers.
For India, reeling under the sharp rise in oil prices and the burden of a steadily depreciating rupee, continued flow of Iran oil even as sanctions kick in on November 4 would be a great relief.