Iran Current Affairs

Iraq overtakes Saudi Arabia as India’s biggest Oil Supplier

Iraq has overtaken Saudi Arabia to become India’s top crude oil supplier by supplying 38.9 million tonnes (MT) crude oil in the current financial year. It was fifth of the India’s oil needs.

India is 80% dependent on imports to meet its oil needs. India had imported 184.4 MT of crude oil during April-January period of 2017-18 period as compared to 213.9 MT in the entire 2016-17 fiscal, and 202.8 MT in 2015-16.

Key Facts

Saudi Arabia traditionally has been India’s top oil source but Iraq dethroned it. Saudi Arabia supplied 30.9 MT of crude oil in first 10 months of current fiscal. Iran continued to be third largest supplier, selling 18.4 MT during April-January.  This is the second year in a row that Iran has occupied the third position. Venezuela is India’s fourth largest supplier with 15.5 MT during April-January, followed by Nigeria with 14.9 MT.

Imports from West Asia

India’s dependence on West Asia for its crude oil needed has increased from 58% in 2014-15 to 63.7% in April-January period of this fiscal. India had imported 109.9 MT out of 189.4 MT of total crude imports in 2014-15 from region. In the current fiscal so far, West Asia has accounted for 117.5 MT of crude oil supplies to India.

Reasons for increase of imports from Iraq

Iraq was able dethrone Saudi Arabia as India’s largest crude oil supplier mainly by supplying heavily discounted crude compared to crude oil sold by Saudi Arabia at Official Selling Price of OPEC. In given time period, prices of crude oil had shot up following production cuts by OPEC members. However, Iraq did not followed the aggressive pricing due to its heavy dependence on oil revenues to fund its economy. Moreover, Indian refiners in recent years have invested heavily in modernising plants to more efficiently process low grade crudes including Basra heavy crude from Iraq, giving greater flexibility in the cost-saving oil grades they can buy.

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India sends first wheat shipment to Afghanistan via Chabahar por

India has flagged off shipment of wheat for Afghanistan through Iran’s Chabahar port. It was flagged off from Kandla port in Gujarat by External Affairs Minister Sushma Swaraj and her Afghan counterpart Salahuddin Rabbani through video conferencing.

Key Facts

Chabahar port is strategically located in Sistan-Balochistan province on energy-rich Iran’s southern coast in Gulf of Oman near its border with Pakistan and can be easily accessed from India’s western coast.

The first consignment transfer was part of India’s commitment to send 1.1 million tonnes of wheat to Afghanistan on grant basis. Afghanistan will receive entire amount in six different instalments over coming months. The consignment will be transported to Afghanistan from Chabahar through land route.

Significance

The shipment of wheat is considered as landmark moment as it paves way for operationalisation of Chabahar port as an alternate, reliable and robust connectivity for landlocked Afghanistan, bypassing Pakistan.

It is first shipment going to Afghanistan through Chabahar port after trilateral agreement on Establishment of International Transport and Transit Corridor was signed between India, Afghanistan and Iran during Prime Minister Narendra Modi’s visit to Iran in May 2016.

The operationalisation of Chabahar port will open up new opportunities for trade and transit from and to Afghanistan and enhance trade and commerce between India, Afghanistan and Iran and wider region in wake of Pakistan denying transit access to New Delhi for trade with the two countries.

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