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India Set To Buy Iranian Oil In November Despite U.S. SanctionsIndia Set To Buy

India will buy a total of 9 million barrels of oil from Iran in November, Reuters reported on Friday, citing an industry source, suggesting that India will continue to purchase Iranian crude even after the U.S. sanctions on Tehran return early next month.

Indian Oil Corp will buy 6 million barrels of Iranian oil and Mangalore Refinery and Petrochemicals will purchase another 3 million barrels next month, Reuters’s source with knowledge of the plans said.

Last week, a Bloomberg report said that India wasn’t planning to purchase any Iranian oil in November, suggesting that India may have bowed to U.S. pressure to halt crude oil imports from Iran.

India is Iran’s second-largest single oil customer after China and was expected to cut back on Iranian oil purchases, but unlikely to cut off completely the cheap Iranian oil that is suitable for its refineries.

India wants to keep importing oil from Iran, because Tehran offers some discounts and incentives for Indian buyers at a time when the Indian government is struggling with higher oil prices and a weakening local currency that additionally weighs on its oil import bill.

But the U.S. continues to insist that it expects Iranian oil buyers to bring their purchases down to zero. Last month, after meeting with top Indian officials to discuss Iran’s oil, U.S. Secretary of State Mike Pompeo said that “We have told the Indians consistently, as we have told every nation, that on November 4th the sanctions with respect to Iranian crude oil will be enforced, and that we will consider waivers where appropriate, but that it is our expectation that the purchases of Iranian crude oil will go to zero from every country, or sanctions will be imposed.”

Last month, Indian refiners were said to be cutting loadings for September and October, to less than 12 million barrels each month, which would be nearly half of what they imported earlier this year.

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh G Salameh on October 05 2018 said:
    Despite claims by the likes of Bloomberg, Goldman Sachs and other investment banks and analysts of different shapes and sizes that India is going to cut its crude oil imports from Iran, the truth will out. Reports from Reuters suggest that India will buy a total of 9 million barrels of oil from Iran in November even after the US sanctions are implemented.

    The Trump administration and the US Secretary of State Mike Pompeo are deluding themselves when they say that they expect Iranian oil buyers to bring their purchases down to zero or sanctions will be imposed on them.

    I am on record having repeatedly been saying that US sanctions against Iran oil exports are doomed to fail miserably and that Iran will not lose a single barrel from its oil exports.

    95% of Iranian oil exports go to China (35%), India (33%), the European Union (20%) and Turkey (7%) and all of them announced that they will not comply with the sanctions. The remaining 5% goes to Japan and South Korea and both said they will apply for a US waiver and they will get it.

    Moreover, India has already made it clear that it doesn’t recognize any sanctions except United Nations sanctions meaning that it will not comply with US sanctions on Iran.

    India is now considering buying Iranian crude oil and paying for it in either a barter trade agreement or in a currency swap agreement.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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