NEW DELHI: The Ministry of Petroleum and Natural Gas on Tuesday said it will ensure adequate supply of crude oil to India’s oil refineries from May 2019 onwards, when US waivers to sanctions on Iran end. “We will ensure there are additional supplies from other major oil-producing countries from different parts of the world, such as Saudi Arabia, Kuwait, UAE and Mexico,” it said.
Indian Oil Corp chairman Sanjiv Singh pointed out that the impact of the US decision to end waivers, which had allowed India to buy Iranian crude despite sanctions imposed by America on such imports worldwide, may reflect on global oil prices, which may temporarily go up, but supplies would not be a problem as the company had been lining up alternative supplies for the past few months.
IOC has the option to take 0.7 million tonnes of crude oil from Mexico on top of its committed purchase of 0.7 million tonnes during the year. From Saudi Arabia, it has an optional volume of 2 million tonnes on top of a term contract of 5.6 million tonnes. Similarly, it has optional volumes of 1.5 million tonnes from Kuwait and another 1 million tonnes from the UAE. “We have all the supplies tied up, and I think globally crude will be readily available, but it is difficult to say what the impact will be on price,” he added.
In the aftermath of the US announcement, shares of India’s oil marketing firms are trading under pressure, though oil exploration stocks traded up. For instance, Indian Oil—which imported 9 million tonnes of Iranian oil in 2018-19, the maximum for a refiner in the country—was trading down by 0.87 per cent at Rs 148.4 on BSE, while shares of Hindustan Petroleum Corp were trading at Rs 251.25, up 0.40 per cent from the last close. Shares of Bharat Petroleum Corp are also trading lower by 1.54 per cent at Rs 335.20, while shares of Indraprastha Gas Ltd were trading at Rs 39, down by 0.64 per cent on BSE.