India preparing for cut in oil imports from Iran-sources

A petroleum refinery in Mumbai. Indian refiners have been urged by the government to seek alternatives to Iranian crude. (Shutterstock)
Updated 28 June 2018

India preparing for cut in oil imports from Iran-sources

  • Oil ministry on Thursday urged refiners to scout for alternatives to Iranian oil
  • New US sanctions on Iran begin to take effect from August

NEW DEHLI: India’s oil ministry has asked refiners to prepare for a "drastic reduction or zero" imports of Iranian oil from November, two industry sources said, the first sign that New Delhi is responding to a push by the United States to cut trade ties with Iran. India has said it does not recognize unilateral restrictions imposed by the US, and instead follows UN sanctions. But the industry sources said India, the biggest buyer of Iranian oil after China, will be forced to take action to protect its exposure to the US financial system.
India’s oil ministry held a meeting with refiners on Thursday, urging them to scout for alternatives to Iranian oil, the sources said.
“(India) has asked refiners to be prepared for any eventuality, since the situation is still evolving. There could be drastic reduction or there could be no import at all,” said one of the sources, who has knowledge of the matter.
During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil, although it had to reduce imports as shipping, insurance and banking channels were choked due to the European and US sanctions.
The source said this time the situation is different.
“You have India, China and Europe on one side, and US on the other... At this moment we really don’t know what to do, but at the same time we have to prepare ourselves to face any eventuality,” said the source.
While a State Department official has said that Washington wants Iranian oil buyers to halt imports from November, US Ambassador to the United Nations Nikki Haley has told Indian Prime Minister Narendra Modi to lessen dependence on Iranian oil.
Haley, currently in Delhi, spoke with US Secretary of State Mike Pompeo early on Wednesday, before meeting Modi. The US push to curb countries’ imports of Iranian oil comes after President Donald Trump withdrew from a 2015 deal between Iran and six world powers and ordered a reimposition of sanctions on Tehran.
Some sanctions take effect after a 90-day “wind-down” period ending on Aug. 6, and the rest, notably in the petroleum sector, following a 180-day “wind-down period” ending on Nov. 4.
Under pressure from the US sanctions, Reliance Industries Ltd, the operator of the world’s biggest refining complex, has decided to halt imports.
Nayara Energy, an Indian company promoted by Russian oil major Rosneft, is also preparing to halt Iranian oil imports from November after a communication from the government, a second source said. The company has already started cutting its oil imports from this month.
Indian Oil Corp, Mangalore Refineries and Petrochemicals Ltd. and Nayara Energy, the top three Indian buyers of Iranian oil, and the oil ministry did not respond to Reuters’s request for comments.
Removing Iranian oil from the global market by November as called for by the United States is impossible, an Iranian oil official told the semi-official Tasnim news agency on Wednesday.
The options to find replacements to Iranian oil have widened after OPEC agreed with Russia and other oil-producing allies last week to raise output from July by about 1 million bpd, with Saudi Arabia pledging a “measurable” supply boost but giving no specific numbers.
Saudi Arabia’s plans to pump up to 11 million barrels of oil per day (bpd) in July would mark a new record, an industry source familiar with Saudi oil production plans told Reuters on Tuesday.
The second source said there were plenty of options available in the market to replace Iranian oil. “There are companies and traders that are willing to give you a 60 day credit, crude is available in the market,” the source said.
To boost its sales to India, Iran recently offered virtually free shipping and an extended credit period of 60 days.
“We can buy Basra Heavy, Saudi or Kuwait oil to replace Iran. Finding replacement barrels is not a problem, but it has to give the best economic value,” a third source in New Delhi said.


Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

Updated 17 October 2019

Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

  • American companies, significantly disrupting its ability to source key parts
  • Huawei was all but banned by the United States in May from doing business with American companies

SHENZHEN, SHANGHAI: Huawei Technologies Co. Ltd’s third-quarter revenue jumped 27%, driven by a surge in shipments of smartphones launched before a trade blacklisting by the United States expected to hammer its business.
Huawei, the world’s biggest maker of telecom network equipment and the No. 2 manufacturer of smartphones, was all but banned by the United States in May from doing business with American companies, significantly disrupting its ability to source key parts.
The company has been granted a reprieve until November, meaning it will lose access to some technology next month. Huawei has so far mainly sold smartphones that were launched before the ban.
Its newest Mate 30 smartphone — which lacks access to a licensed version of Google’s Android operating system — started sales last month.
Huawei in August said the curbs would hurt less than initially feared, but could still push its smartphone unit’s revenue lower by about $10 billion this year.
The tech giant did not break down third-quarter figures but said on Wednesday revenue for the first three quarters of the year grew 24.4% to 610.8 billion yuan.
Revenue in the quarter ended Sept. 30 rose to 165.29 billion yuan ($23.28 billion) according to Reuters calculations based on previous statements from Huawei.
“Huawei’s overseas shipments bounced back quickly in the third quarter although they are yet to return to pre-US ban levels,” said Nicole Peng, vice president for mobility at consultancy Canalys.
“The Q3 result is truly impressive given the tremendous pressure the company is facing. But it is worth noting that strong shipments were driven by devices launched pre-US ban, and the long-term outlook is still dim,” she added.
The company said it has shipped 185 million smartphones so far this year. Based on the company’s previous statements and estimates from market research firm Strategy Analytics, that indicates a 29% surge in third-quarter smartphone shipments.
Still, growth in the third quarter slowed from the 39% increase the company reported in the first quarter. Huawei did not break out figures for the second quarter either, but has said revenue rose 23.2% in the first half of the year.
“Our continued strong performance in Q3 shows our customers’ trust in Huawei, our technology and services, despite the actions and unfounded allegations against us by some national governments,” Huawei spokesman Joe Kelly told Reuters.
The US government alleges Huawei is a national security risk as its equipment could be used by Beijing to spy. Huawei has repeatedly denied its products pose a security threat.
The company, which is now trying to reduce its reliance on foreign technology, said last month that it has started making 5G base stations without US components.
It is also developing its own mobile operating system as the curbs cut its access to Google’s Android operating system, though analysts are skeptical that Huawei’s Harmony system is yet a viable alternative.
Still, promotions and patriotic purchases have driven Huawei’s smartphone sales in China — surging by a nearly a third compared to a record high in the June quarter — helping it more than offset a shipments slump in the global market.