India to resume buying oil from Iran once US sanctions easePTI | New Delhi | Updated: 08-04-2021 15:57 IST | Created: 08-04-2021 15:55 IST
India will look to resume buying crude oil from Iran the moment US sanctions are eased, helping it diversify its import basket, a senior government official said.
''Once the sanctions are lifted, we can look to resume oil imports from Iran,'' the official, who did not wish to be identified, said.
Indian refiners have begun preparatory work and can swiftly enter into contracts once the sanctions are lifted, he said.
''We already have a template for commercial terms and we can very quickly enter into contracts the moment Iran is cleared for exporting oil,'' the official said.
Iranian oil coming into the market will not just cool prices but also help India diversify its import basket.
''We have been advocating for oil producers to pump in more oil by easing output caps,'' the official said. ''Rising oil prices are a threat to the fragile economic recovery around the globe including in India.'' India, he said, did not advocate for such output increases when prices were within a certain reasonable limit.
''We voiced our concerns when oil crossed USD 63-64 on a sustained basis,'' he said. ''We want prices that are reasonable for producers and affordable for consumers.'' India -- once Iran's second-biggest customer -- imports more than 85 per cent of its oil needs. Iranian crude will bring a number of benefits, including a longer credit cycle and shorter voyage savings on freight costs.
Iranian exports tumbled after former US President Donald Trump tightened sanctions in 2018 and ended waivers for some countries in 2019, including India.
Iran and world powers this week began their most serious attempt yet to resurrect a nuclear deal.
Iran re-started a banned nuclear program after Trump pulled out of the deal and re-imposed sanctions on Iran. Even though new US President Joe Biden wants to rejoin, both sides say the other must make the first move.
Till 2010-11, Iran was India's second-biggest supplier of crude oil after Saudi Arabia but Western sanctions over its suspected nuclear program relegated it to the seventh spot in the subsequent years. In 2013-14 and 2014-15, India bought 11 million tonnes and 10.95 million tonnes, respectively from it.
Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 60 days of credit for purchases, terms not available from suppliers of substitute crudes -- Saudi Arabia, Kuwait, Iraq, Nigeria and the US.
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