India plans to buy 6 million barrels of Iranian crude oil after its talks with the United Arab Emirates’ national oil company for supplies came to a close over commercial terms, industry sources said.
Three industry sources with direct knowledge of the matter said India would buy 6 million barrels of Iranian Mix crude from the National Iranian Oil Company (NIOC) in October and November to fill half the Mangalore storage facility in the southwestern state of Karnataka, Reuters reported on Tuesday.
According to the report, State firm Bharat Petroleum Corp will buy 4 million barrels in two very large crude carriers (VLCCs) and Mangalore Refineries and Petrochemicals Ltd (MRPL) will import 2 million barrels, the three sources said.
“The two refiners decided to buy Iranian Mix as it suits their refineries,” said one of the sources.
The step comes as Iran’s daily crude exports to India surged to the highest level in 15 years in August.
India in 2014 began talks to lease part of its strategic storage to Abu Dhabi National Oil Co (ADNOC). Under such a deal, India would have first rights to the stored crude in case of emergency, while ADNOC would be able to move cargoes to meet any shift in demand.
“Talks have not moved forward with ADNOC despite several rounds of discussion. We (India and the UAE) are stuck on commercial terms,” said one of the sources.
To take advantage of falling oil prices pending the conclusion of a deal with the UAE, India’s oil ministry instructed BPCL and MRPL to select a grade to fill half the Mangalore facility, the sources said. They chose Iranian Mix.
(Source: Tasnim, under Creative Commons licence)