India’s Iran oil purchases to fade ahead of US sanctions

India’s Oil Ministry told refiners to prepare for a ‘drastic reduction or zero’ imports from Iran from November. (AFP)
Updated 15 September 2018

India’s Iran oil purchases to fade ahead of US sanctions

  • India’s loadings from Iran for this month and next will drop to less than 12 million barrels each
  • India’s Oil Ministry in June told refiners to prepare for a drastic reduction or zero imports from Iran from November

NEW DELHI: Indian refiners will cut their monthly crude loadings from Iran for September and October by nearly half from earlier this year as New Delhi works to win waivers on the oil export sanctions Washington plans to reimpose on Tehran in November.
India’s loadings from Iran for this month and next will drop to less than 12 million barrels each, after purchases over April-August had been boosted in anticipation of the reductions.
The US is renewing sanctions on Iran after withdrawing from a 2015 nuclear deal. Washington reimposed some of the financial sanctions from Aug. 6, while those affecting Iran’s petroleum sector will come into force from Nov. 4.
India, Iran’s No.2 oil client behind top buyer China, does not recognize the reimposed US sanctions, but winning a waiver from the restrictions is a must for New Delhi to protect its wider exposure to the US financial system.
India’s Oil Ministry in June told refiners to prepare for a “drastic reduction or zero” imports from Iran from November.
“Some refiners have either already exhausted or front-loaded their term contract to a large extent, which allows them the flexibility to go to zero if required, or until clarity on the waivers emerge,” Amrita Sen, chief oil analyst at Energy Aspect, told Reuters.
Washington will consider waivers for Iranian oil buyers such as India but they must eventually halt crude imports from Tehran, US Secretary of State Mike Pompeo said last week in New Delhi after a meeting of high level officials.
The Indian government, already facing a backlash over a falling rupee and record high fuel prices, does not want to halt the oil imports from Iran as the Islamic republic offers a discount on oil sales to India.
NEW DELHI: Government sources said India made this point clear in last week’s meetings with US officials and remains engaged with Washington to work out waivers on its oil purchases from Iran.
“We have a special relationship with both the US and Iran, and we are seeing how to balance this all, and also to balance out the interest of the refiners and end-consumers,” said one government official.
But if Washington adopts a tough line, India would have no choice but to end imports from Iran, they said.
India lifted about 658,000 barrel of oil per day (bpd) from Iran in April-August, according to data obtained from trade sources by Reuters, and the cuts projected for September and October would drop the daily average over those two months by about 45 percent to 360,000-370,000 bpd.
Indian oil refiners have already given the October loading plans to the National Iranian Oil Co. (NIOC), sources familiar with the loading schedule said.
Top refiner Indian Oil Corp. wants to lift 6 million barrels each in September and October, while Mangalore Refinery and Petrochemicals would load 3 million barrels each for those two months, the sources said.
IOC would also lift 1 million barrels for its subsidiary Chennai Petroleum Corp. in October, they said.
Bharat Petroleum Corp. would lift 1 million barrels in September and skip purchases in October, a company source said on Tuesday.
Bharat Petroleum has already drawn more than its fixed volumes — the amount it is obligated to purchase — that were contracted for 2018/19, its chairman said on Tuesday.
Nayara Energy, part owned by Russian oil giant Rosneft, plans to lift 1 million barrels each in September and October, the sources said. But the refiner began reducing its oil imports from Iran in June and aims to completely halt purchases from November.
Hindustan Petroleum, Reliance Industries and HPCL Mittal Energy (HMEL) have no plans to buy from Iran in September and October, they said.
Indian refiners — excluding Reliance and HMEL, which do not have term contracts with Iran — will together lift about 73 percent of their fixed contract volumes from Iran by end-October, the loading data showed.
IOC, Nayara and MRPL did not respond to requests for comment.


US removes some Chinese furniture, modems from planned 10% tariffs

Updated 18 min 48 sec ago

US removes some Chinese furniture, modems from planned 10% tariffs

  • US President Donald Trump on Tuesday delayed more than half of the proposed tariffs until December
  • The $114 billion retail furniture industry has been among the sector’s hardest hit with price increases due to Trump’s tariffs

WASHINGTON: The Trump administration is sparing some Chinese-made household furniture, baby items and Internet modems and routers from its next rounds of 10 percent tariffs, it said on Friday.
The US Trade Representative’s office released a complete list of the items that were removed from $300 billion in tariffs scheduled to go into effect on Sept. 1 and Dec. 15, some of which had already been hit with 25 percent tariffs.
Trump on Tuesday delayed more than half of the proposed tariffs until December, saying it would help shield businesses and consumers from the US-China trade war fallout during the Christmas selling season.
The new list of 44 categories of spared imports, worth about $7.8 billion according to US Census Bureau data, also includes some chemical compounds used in the manufacture of plastics. Reuters previously reported that bibles and religious texts would be spared from the tariff list.
Modems and routers made in China were part of a $200 billion list of products hit with tariffs last September that have since been raised to 25 percent. Friday’s exclusion would avoid a further 10 percent hike as Trump imposes tariffs on Sept. 1 to products in the same broad customs category, including smart watches, smart speakers and Bluetooth headphones.
The bulk of the items removed from the tariff list were furniture products, including wooden- and metal-framed chairs and those made of plastics. Some of these were previously hit with tariffs as part of broader furniture categories.
Baby-related furniture items also were spared, including toddler beds, bassinets, cradles, strollers and children’s seats.
The $114 billion retail furniture industry has been among the sector’s hardest hit with price increases due to Trump’s tariffs, which rose to 25 percent in May.
The US Labor Department said on Tuesday that the price index for household furnishings rose 0.4 percent in July, marking its third consecutive monthly increase and contributing to broad-based growth in consumer prices during July.