NEW DELHI: State-run Indian Oil Corporation (IOC) has ceased the usual yearly term contract with sanctions-hit Iran for import of crude oil this financial year as it is bullish on replacing Iranian crude completely with other alternatives of similar quality.
“We have tied up supplies from alternate sources. No single country can make up for the volumes lost. So, we are keeping our sources diverse. Also, we have robust sourcing in place to make up for all of the Iranian oil,” said Sanjiv Singh, IOC chairman. In FY19, the company sourced about 9 million tonnes of crude oil from Iran.
To make up for the bulk of the volumes lost, IOC has tied up for imports from the US and additionally from Saudi Arabia.
A K Sharma, IOC Director (Finance), said the company has an annual contract to buy 5.6 MT crude oil from Saudi Arabia. “We have exercised our optional volumes with Saudi Arabia and will be importing 2 MT of additional crude oil from Saudi Arabia in six months period beginning July,” he said, adding the optional volumes imported from July to December total to about 1.5-1.6 MT. It has also for the first time signed term import contracts with two US suppliers — Equinor and Sonatrach, adding in all 4.6 MT of crude from the US that has been signed up for 2019.
On Friday, IOC said its fourth-quarter profit surged 16.89 per cent to `6,099 crore from `5,218 crore a year ago. Total income during the quarter under review stood at `1.45 lakh crore, growing 6.26 per cent YoY.