India reduces oil imports by half from Iran

India’s imports of crude oil from Iran more than halved in June from a year ago as refiner Essar Oil became the only remaining Indian client of the sanctions hit country. Tanker data showed that India’s imports for June fell about 60 per cent on an annual basis, pointing to imports from Iran’s top four customers-China, Japan, India and South Korea of around 8,60,000 barrels per day for the month down more than a third on the year.

That would be the lowest for Iran’s top four buyers since April, when big drop offs in barrels shipped into India and Japan cut the total to 6,35,750 barrels per day the smallest in decades. US and European Union sanctions aimed at Iran’s disputed nuclear programme are costing Tehran billions of dollars per month.

And US lawmakers want to toughen them further with the goal of reducing Iran’s oil shipments to 5,00,000 barrels per day or less. Praveen Kumar who heads the South Asia oil and gas team at consultancy FGE said that the downturn YoY of Iranian crude imports will continue. Everyone was waiting for the elections (in Iran) to happen and hoping that the new president will be more open to coming back to the negotiating table but we don’t think there is going to be a breakthrough.

Iran’s president elect, Hassan Rouhani who takes office next month pledged in June to be more transparent on the nuclear programme but no immediate curtailment of its uranium enrichment is expected. Data from trade sources on tanker arrivals showed that Indian imports from Iran dropped to 1,40,800 barrels per day in June down 45 per cent from May. India’s imports from Iran dropped in the H1 of the year to 211,400 barrels per day down more than 42 per cent from the same period in 2012.