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Indian refiners turn to OPEC, Mexico, US to make up Iran oil gap; IOC likely to buy 1.5 mn tonne crude from Mexico

New Delhi: Indian refiners are increasing their planned purchases from OPEC nations, Mexico and the United States to make up for any loss of Iranian oil if the US enforces sanctions more harshly from next month, sources and company officials said.

All four Indian state-owned refiners that buy Iranian oil are confident of securing additional barrels from other producers, officials from the companies told Reuters.

The state refiners have not yet placed orders for Iranian oil for May, when the current waiver expires, pending clarity from the United States.

 Indian refiners turn to OPEC, Mexico, US to make up Iran oil gap; IOC likely to buy 1.5 mn tonne crude from Mexico

Representational image. Reuters

India’s Bharat Petroleum Corp (BPCL) and Mangalore Refinery and Petrochemicals Ltd (MRPL) have tapped Iraq to make up for Iranian oil, while Indian Oil Corp (IOC) has signed its first annual contract with US suppliers and raised supplies from Mexico.

“There will be no supply constraints. The supply can come from both OPEC and non-OPEC nations like the US,” said MK Surana, chairman of Hindustan Petroleum Corp, which purchased up to 1.5 million tonnes per year of Iranian crude in 2018/19.

The Organisation of the Petroleum Exporting Countries (OPEC) and other producers including Russia have gradually tightened supply through 2019 to reduce a global glut. OPEC and its partners may not renew the curbs when they expire after June because of the risk of over-tightening the market.

IOC, India’s top refiner and Iran’s biggest Indian client, will cut Iranian oil imports to 6 million tonnes, or about 120,000 barrels per day, in the 2019/20 period from 9 million in 2018/19, and has raised the optional volumes it can buy from other producers to 2 million tonnes, a company official said.

“Our optional quantities under term deals are higher than last year. We have optional contracts with Saudi Arabia, Kuwait and other suppliers... They will supply more if we want,” the official said, adding his firm would also buy more US oil if required.

IOC also hopes to buy 1.5 million tonnes of Mexican oil in 2019, compared with 1 million tonnes last year, the source said.

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Updated Date: Apr 17, 2019 18:57:09 IST

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