Indian refiners have access to only limited Iranian volumes compared with Russian oil, and even the barrels on offer come with 'too many hassles'.
The US has sanctioned an Indian national based in the United Arab Emirates and two India-based entities for operating as part of Iran's shadow fleet and involved in shipping Iranian oil. The US Department of the Treasury said Jugwinder Singh Brar, who owns multiple shipping companies, operates as part of Iran's shadow fleet, which the US said is used to evade sanctions and transport Iranian oil. Brar also owns or controls India-based shipping company Global Tankers Private Limited and petrochemical sales company B and P Solutions Private Limited. The sanctions come as part of a US campaign of maximum pressure on Iran and target the country's petroleum and petrochemical sectors.
India on Monday lost the ONGC Videsh Ltd-discovered Farzad-B gas field in the Persian Gulf after Iran awarded a contract for developing the giant gas field to a local company. "The National Iranian Oil Company (NIOC) has signed a contract worth $1.78 billion with Petropars Group for the development of Farzad B Gas Field in the Persian Gulf," the Iranian oil ministry's official news service Shana reported. "The deal was signed on Monday, May 17, in a ceremony held in the presence of Iranian Minister of Petroleum Bijan Zangeneh in Tehran." The field holds 23 trillion cubic feet of in-place gas reserves, of which about 60 per cent is recoverable.
Officials from India's biggest private refiner recently visited Iran to chalk out the details for resumption of trade ties with Tehran.
Clearing the way for oil refiners to pay Iran in Indian rupee, the Union Budget has exempted the payments made for crude oil purchased from the Persian Gulf nation, from any local tax.
In a temporary reprieve, India will pay for Iranian crude oil in euros through a German bank based in Hamburg, while a permanent solution to the payment issue will be explored at a meeting in Teheran next week.
"We are exploring if Indian oil firms can open accounts in banks like Dubai-based Noor Islamic Bank so they can undertake a direct transfer of money for oil they buy from Iran," a senior government official said.
More than three months after RBI scrapped a long-standing payment mechanism used to pay for Iranian crude imports, India has resumed payments to the nation's second largest oil supplier using an alternative system.
Oil prices this year could surge up to $80 a barrel due to the increasing demand for the gasoline and disruptions in crude supplies from Nigeria, said a senior Iranian oil official.
Iran has complained of irregular shipments
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