NEW DELHI: India’s oil imports from Saudi Arabia have jumped by 32 percent after US sanctions against Iran came into effect, making Riyadh the second-largest crude supplier to the South Asian republic.
According to data released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), a Kolkata-based organization associated with the Indian Ministry of Commerce, the dwindling supply of crude oil from Iran has seen an increase in imports from Iraq, Saudi Arabia, the US and Nigeria.
Imports from Saudi Arabia reached 3.55 million tons (MT) in May this year compared to 2.68 last year, the report said. At the same time, crude supply from Iran went down to 0.56 MT from 3.13MT. Iran was the third-largest importer of oil to India.
“Imports from other Middle Eastern countries have increased by 30-40 percent after we replaced crude from Iran. Middle Eastern countries present logistic advantage, that’s why their choice was logical,” said R. Ramachandran, director (refineries) of Bharat Petroleum Corporation Limited (BPCL), a leading oil company owned by the Indian government.
“I cannot tell you the exact percentage but we have replaced Iranian crude with Saudi (crude) and some other countries,” Ramachandran told Arab News.
New Delhi was compelled to cut off imports from Iran after the Trump administration imposed sanctions on Iranian oil exports.
India was one of eight countries given a waiver from the US to import oil from Iran, but the waiver expired on May 2.
The issue of the ban on Iranian imports has been one of the sour points in the relationship between India and the US.
Secretary of State Mike Pompeo tried to address the issue by assuring New Delhi of adequate oil supply from the US during his visit to India on Wednesday.
“We’re doing everything we can to ensure that you have adequate crude imports. We appreciate your help in pushing these regimes to behave like normal countries,” Pompeo said in a speech in New Delhi on Wednesday evening.
“You’ve made hard choices to cut off oil imports from Iran, and move away from purchasing Venezuelan oil. We know these decisions weren’t without cost,” he said.
Indian Foreign Minister Subrahmanyam Jaishankar told reporters after the interaction with his US counterpart: “I underlined the importance of stability, predictability and affordability in terms of India’s energy imports.”
He also said that the US is “very receptive” to India’s concerns about its global energy supplies.
BPCL chief Ramachandran said: “We have more opportunities available to import oil from the US, which is working out to be more economical than we expected.”
News reports quoting a spokesperson from the Indian petroleum ministry said that New Delhi had stopped importing oil from Iran.
Madhu Nainan, an editor of Petrowatch, a leading news portal on the Indian oil industry, said: “India has found alternative sources of crude supply, most importantly the USA and some of the Middle Eastern countries — a prominent one being Saudi Arabia.”
“Saudi Arabia being in a neighboring region means it is able to supplant oil from Iran. Besides, the growing bonhomie between the two nations also adds value to the relationship,” Nainan told Arab News.