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India has been cutting imports of Iranian crude oil, making good on its promise to reduce imports by around 20 percent this fiscal year ending March 2018, in a possible retaliation for Tehran not awarding the development of a gas field in Iran to Indian firms.
According to ship tracking data from sources and data compiled by Thomson Reuters Oil Research & Forecasts, India’s oil imports from Iran dropped by 16.3 percent in July from June, to 414,900 bpd. Compared to July last year, India’s crude imports from the Islamic Republic plunged by 20.7 percent, Thomson Reuters Oil Research & Forecasts data show.
At the end of May, Iran’s Oil Minister Bijan Zanganeh said that Tehran had signed an initial agreement with Russia’s gas giant Gazprom for the development of the Farzad B gas field, in what was the latest episode of the saga over the field which Tehran had been taking its time to award to an Indian consortium.
In August, India’s crude imports from Iran are expected to further drop, by 25 percent month on month, to 310,000 bpd, Reuters reported, citing sources with knowledge of the loading schedules. While Iran’s exports to India are seen down to their lowest level since February 2016—just after many Western sanctions on Iran’s oil were lifted—Iran’s sales to China are seen up this month to their highest in 11 months after Tehran cut prices and demand for its heavier grades increased, according to Reuters.
Related: Natural Gas Prices Poised To Rise As Exports Boom
In India’s oil imports in July, Iraq emerged as the biggest winner as India was replacing part of Iranian, Venezuelan, and UAE imports with Iraqi ones, Thomson Reuters Oil Research & Forecasts show.
India’s imports from Iraq jumped by 31.5 percent month on month in July to 954,400 bpd, and Iraq was India’s top oil provider for a fourth consecutive month. Second was Saudi Arabia, whose exports to India jumped by 34.1 percent from June, to stand at 888,400 bpd in July.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.