India's Nayara Energy Begins Cutting Iranian Oil Imports

India's Nayara Energy Begins Cutting Iranian Oil Imports

Tuesday, 12 June, 2018 - 07:30
Gas refineries are seen in Asalouyeh, 1,000 km (621 miles) south of Tehran, January 27, 2011. (File Photo: Reuters)
New Delhi – Asharq Al-Awsat
Indian refiner Nayara Energy began cutting imports from Iran this month after the United States withdrew from the nuclear deal with Tehran and said it would re-impose tough sanctions, according to three sources familiar with the matter who declined to be identified as they were not authorized to talk to media.

Last year, Russian state oil-giant Rosneft and partners bought Nayara in a $12.9 billion deal. It typically buys around 5.5-6 million barrels a month from Iran, according to data made available to Reuters from industry and shipping sources.

Cuts made by Nayara are the latest indication that Asian buyers will cut orders from Iran after US President Donald Trump last month pulled out from the 2015 nuclear deal between Iran and world powers that lifted sanctions on Tehran in exchange for curbs to its nuclear program.

“Nayara will be lifting about 40-50 percent less than the average volumes, limiting its intake of Iranian oil to about 3-4 million barrels in a month,” said one of the sources.

Iran’s oil exports hit 2.7 million barrels per day (bpd) in May, the Oil Ministry’s news agency reported earlier this month.

India, the world’s third-biggest oil consumer and importer and one of the country’s biggest buyers of Iranian oil, imports about 4.5 million bpd.

Asked by Reuters whether Nayara plans to reduce monthly Iranian oil imports by 40-50 percent, the company said, “there are no specific cutbacks planned as of now,” adding “we are still seeking clarifications from all concerned.”

Earlier, Nayara’s chief executive B. Anand said the refiner did not expect problems in finding alternative supplies in should it reduce Iranian orders. Anand said Nayara would leverage the supply and trading network of its major stakeholders, Rosneft and Swiss commodity trader Trafigura, to replace Iranian oil.

Editor Picks