February 19, 2019

Tehran says Saudi Arabia unable to replace lost Iranian oil

08 October 2018, 07:07 | Joann Bryant

Tehran says Saudi Arabia unable to replace lost Iranian oil

Tehran says Saudi Arabia unable to replace lost Iranian oil

A USA government official said on Friday that the administration was considering waivers on Iran's oil sanctions.

The comments followed news that India, Iran's No. 2 oil customer after China, will buy 9 million barrels of Iranian oil in November.

Reuters said that Indian Oil would buy six million barrels of oil and Mangalore Refinery and Petrochemicals three million barrels.

With US sanctions on Iran looming, Moody's Investors Service had estimated a $500 million decline in earnings for Indian state-owned refiners, IOC, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) on account of substituting crude oil imports from the Persian Gulf country.

Increasing tensions between the United States and Venezuela; the USA demanding an end to all imports of Iranian oil by early November; and the rupee's performance as Asia's worst performing currency of the year have compounded the situation and put India in a hard spot.

India is Iran's second-largest single oil customer after China and was expected to cut back on Iranian oil purchases following USA sanctions.

White House National Security Advisor John Bolton said only last week that the administration wanted to avoid all waivers and see Iranian oil and gas exports entirely staunched, but that it might not be able to achieve that aim.

India is going to continue buying Iranian oil in November despite the US sanctions, Reuters reported citing sources close to the Indian oil industry.

Pradhan reportedly said Monday that India does not know if it would get a waiver from the U.S.

India, Iran's No.2 oil client behind China, does not recognise the USA sanctions.

Opec accounts for around 40% of the global production.

Global benchmark Brent crude oil futures LCOc1 were at $83.26 per barrel at 0352 GMT, down 90 cents, or 1.1 percent, from their last close.

Reports about falling Iranian exports of oil and condensate abound, but there is one important detail: usually, these are reports about tracked tankers carrying Iranian oil and condensate.

None of the Iranian crude exported in the first week of October is heading for Europe, according to the Refinitiv data.

On Monday, petrol and diesel were selling at Rs 82.03 per litre and Rs 73.82 per litre, respectively, in New Delhi.

In the run-up to 2019 general elections, Fitch Ratings recently raised the spectre of return of state control on fuel pricing in India.

Oil prices have extended a rally on expectations the sanctions will test the Organization of the Petroleum Exporting Countries and other producers.

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