Petroleum Minister Dharmendra Pradhan said on Monday that Indian refiners received more oil from Iran than from Saudi Arabia in the last quarter (April-June). Due to this, it regained its position after 7 years. Toughening of sanctions on Iran by US government is not showing any effects.
Dharmendra Pradhan told lawmakers in a written reply that India shipped-in 5.67 million tonnes or about 457,000 (bpd) of oil from Iran in the first 3 months of this fiscal year.
Iraq continues to be the top oil supplier to India in the April-June period.
New Delhi shipped-in 7.27 million tonnes of oil from Iraq, while shipments from Saudi Arabia figured 5.22 million tonnes — making it the third-largest supplier, Pradhan’s statement showed.
Sanctions on Iran by US
United States sanctions against Iran refer to economic, trade, scientific and military sanctions against Iran, which have been imposed by the U.S. Office of Foreign Assets Control, or by the international community under U.S. pressure through the United Nations Security Council.
In 1979, after the U.S. permitted the exiled Shah of Iran to enter the United States for medical treatment, a group of radical students took action in Tehran by seizing the American Embassy and taking hostage the people inside. The United States responded and President Carter issued Executive Order 12170 in November 1979 freezing about $12 billion in Iranian assets, including bank deposits, gold and other properties.
The sanctions against Iran has met a lot of criticism. According to the U.S. National Foreign Trade Council, in the medium-term, lifting US sanctions and liberalizing Iran’s economic regime would increase Iran’s total trade annually by as much as $61 billion (at the 2005 world oil price of $50/bbl), adding 32 percent to Iran’s GDP. In the oil-and-gas sector, output and exports would expand by 25-to-50 percent (adding 3 percent to world crude oil production).
Opening Iran’s market place to foreign investment could also be a boon to competitive US multinational firms operating in a variety of manufacturing and service sectors.
Pressure by US on India
Indian Oil Ministry has asked refiners to prepare for the ‘zero Iranian oil import’ from November as United States cut business ties with Iran. The move from India came as a surprise as earlier, India has said that it doesn’t regard unilateral decisions made by US but only decisions made by UN.
But despite showing such a ruthless stand, India, the second biggest Iranian Oil importer after China, is not going to risk itself in front of US Financial system.
US sanctions on Iran pose risk to profitability
Mangalore Refinery and Petrochemical Limited (MRPL) has already shown concern over its profitability if the sanctions on Iran comes into play. MRPL imports 25% of its crude from Iran.
“The sanction on Iran, which is an important supplier of crude to the company, is also an immediate threat to profitability. The reduction in supplies of crude from Iran, following sanctions will have an impact on crude prices globally and will affect the company in the short term,” MRPL said. “To a lesser extent, the ongoing clean fuel regulatory changes will also have an impact on the company and will necessitate the addition of facilities to comply with the requirement.”