India's crude oil imports from Iran declined by about 34% in April, the first evidence of New Delhi implementing cuts in supplies from the sanctions-hit nation under annual deals that began last month.
India's crude oil imports from Iran declined by about 34% in April compared with March, deeper than expected and the first evidence of New Delhi implementing cuts in supplies from the sanctions-hit nation under annual deals that began last month.
State-run buyers are at the forefront of reductions, leaving privately-owned Essar the biggest Indian client of Iran, tanker discharge data showed, just as the US praised steps taken by India's refiners to back Washington's pressure on Tehran.
The US has already granted waivers to the sanctions for Japan and 10 European countries but has left out China and India, Iran's biggest clients.
US Secretary of State Hillary Clinton said on Monday India needed to do more and said a decision on granting a waiver was around two months away.
India's total oil imports from Iran in April fell to about 269,000 barrels per day (bpd) from 409,000 bpd in March and from about 449,000 bpd in April 2011, the data made available to Reuters showed on Tuesday.
Overall in the last contract year to March 31, 2012, India's purchases of crude from Iran were expected to be under 340,000 bpd, India's foreign secretary Ranjan Mathai said in March. Estimates compiled by Reuters based on company plans in July 2011 were for up to about 380,000 bpd.
Indian refiners are expected to cut volumes from Iran by over 20% in this contract year on average, Reuters reported in March.
The shortfall is being made up with extra barrels from the world's biggest exporter, Saudi Arabia, as well as Iraq, which has leapfrogged Iran to be India's No. 2 supplier, among others.
Clinton said Washington was working with New Delhi to find replacements for Iranian oil when she was visiting India this week.
"We commend India for the steps its refineries are taking to reduce imports from Iran and we have also been consulting with India and working with them in some areas on alternative sources of supply," Clinton said on Tuesday, while keeping up the pressure for "even more".
Saudi Oil Minister Ali al-Naimi on Tuesday said the top oil exporter is pumping around 10 million bpd and is storing 80 million barrels to meet any sudden disruption in supplies.
The Kingdom stood ready to tap into its spare capacity of 2.5 million bpd if more crude was needed, he added.
Imports from Iran in January-April surged by almost a quarter to 405,000 bpd compared with last year when lifting of Iranian oil slowed due to payment problems caused when a finance conduit was closed under US pressure.
In the first four months of this year, Iraq has emerged as India's second biggest supplier of oil replacing Iran, followed by Kuwait, Nigeria and the United Arab Emirates. Saudi Arabia continued to be the biggest oil supplier to India.
India's overall oil imports in January-April rose about 10% from a year ago as the country expanded its refining capacity. Total oil imports in April declined 5.7% from March and 2.2% from April last year, the data showed, after stockbuilding in February and March.
India aims to raise its refining capacity from the current 4.3 million bpd to about 6.22 million bpd by 2016/17, while the local fuel demand is expected to rise to 152.94 million tonnes, Oil Minister S. Jaipal Reddy told lawmakers on Tuesday.
Essar replacing MRPL
Indian refiners have been asked privately by the government to cut Iranian oil imports by at least 15% even though publicly New Delhi maintains it does not support unilateral sanctions.
State-run MRPL imported about 19% less oil in April from Iran compared with March at 90,200 bpd, the data showed, while Hindustan Petroleum Corp
Essar has renewed its annual deal of 100,000 bpd with Iran for this fiscal year starting April 1, while MRPL has reduced the size of its deal to 80,000-100,000 bpd compared with 142,000 bpd in 2011/12, industry sources have said.
HPCL aims to buy 60,000 bpd oil from Iran compared with 70,000 bpd in 2011/12.
READ MORE ON crude oil imports, Iran, Essar Oil, Mangalore Refinery and Petrochemicals, Iranian oil imports
ADS BY GOOGLE
video of the day
Be careful while betting on midcaps; like Kotak: Dimensions