NEW DELHI: India’s state-run oil firms have been asked to look for new sources of supplies to fill in the gap created by stoppage of imports from Iran.“We have been readying ourselves for this by tapering off imports from Iran. We cut our monthly imports from Tehran by 50 per cent in February itself. Now that the US has made it clear that there will be no more waivers for India and other countries, we will peruse leads that we already have, which include the possibility of increased supplies from Saudi Arabia, UAE, Kuwait as well as Iraq,” said top petroleum ministry officials.
Indian firms will also be talking to Mexican and US shale oil suppliers to increase offtake from there. However, officials said that India’s mix would require more of West Asian supplies. All refiners mix crude supplies from various sources as each kind of crude has its own properties.
The White House, while announcing the end of waivers, had said that the US and its allies Saudi Arabia and UAE would ensure adequate oil supplies to global consumers. However, Saudi Arabia’s energy minister Khalid al-Falih said on Wednesday that he saw no need to raise oil output immediately after the US ends waivers granted to buyers of Iranian crude, but added that the kingdom would respond to customers’ needs if asked for more oil.
Indian officials, however, said, “We have long standing relations with our suppliers in West Asia and do not anticipate problems in supplies. However, prices are determined by the market. As large buyers, we do get some better prices on contracts that we enter into.” India imported some $115 billion worth of crude oil in the 2018-19 financial year, 40 per cent of it from West Asia.
Brent oil prices were at $74.24 per barrel at 0058 GMT, down 27 cents, or 0.4 per cent, from their last close. Analysts said the lower prices were on account of inventories built up by most big buyers ahead of the US decision to end waivers to a regime of blocking Iranian oil sales. The US State administration had on Monday said that all exemptions would end by May 2.
Looking west
Indian officials are banking on suppliers from West Asia now. India imported around $115 bn worth of crude oil in FY19, 40 per cent of it from West Asia