Iran for the first time ever has surpassed Saudi Arabia to become India’s top crude oil supplier. It was revealed by ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts.
Earlier, Iran used to be India’s second-biggest oil supplier after Saudi Arabia till 2010-11. However, it had ceded its position to Iraq after the tougher western countries sanctions imposed on Iran over its nuclear development programme.
- India’s oil imports from Iran have shot up after sanctions were lifted in January 2016. In October 2016, oil imports from Iran surged more than threefold as compared October 2015.
- In October 2016, India imported 7,89,000 barrels per day (bpd) from Iran compared to 6,97,000 bpd supplied by Saudi Arabia.
- In the January to October 2016 period, Saudi Arabia still holds India’s top supply spot, at an average of 8,30,000 bpd against Iraq’s 7,84,000 bpd and Iran’s 4,56,400 bpd.
What are reasons for sudden surge?
- Iran produces almost 4 million bpd of oil and exports 2.4 million bpd. Its arch rival Saudi Arabia, has increased its capacity to refine oil rather than exporting more crude.
- Iranian price discounts has attracted purchases from India’s programme to build up its strategic petroleum reserves (SPR).
- For the SPR stocks, India imported 2 million barrels of Iran and is going to import another 4 million barrels in November 2016.
- Besides, buyers of Iranian oil which had stopped imports during the sanctions period again have returned. It includes, Indian refiners including Reliance Industries Ltd, operator of the world’s biggest refinery complex at Jamnagar.