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Bharat Petroleum Corporation Limited (BPCL), a state-controlled Indian refiner, could resume buying crude from Iran once U.S. sanctions are lifted, but it would only do so if the Islamic Republic sells its oil at a discount to make it more attractive, an official at the Indian company told Reuters on Thursday.
Without U.S. sanctions and with Iranian price concessions, BPCL could return to buying 2 million tons of crude from Iran per year, as it did before the sanctions. Yet, BPCL does not plan to raise its imports from Iran too much over that figure, BPCL’s head of finance, N. Vijayagopal, told Reuters.
The actual volume BPCL would be buying will depend on how competitive the price of Iranian crude will be compared to similar grades, the manager added.
Major Indian state-held refiners plan to cut back on spot crude purchases later this year, expecting that the U.S. sanctions on Iran’s oil could be lifted by the end of 2021, officials at the refiners told Reuters last week.
The biggest refiner Indian Oil Corporation, as well as BPCL, Hindustan Petroleum Corporation, and Mangalore Refinery and Petrochemicals, plan to reduce spot crude buying and buy Iranian oil if the sanctions are lifted and the price is right, officials at those companies told Reuters.
India’s refiners halted imports from Iran several months after the previous U.S. Administration slapped sanctions on the Islamic Republic’s oil industry and withdrew from the so-called nuclear deal in 2018.
The Biden Administration has been indirectly talking to Iran for a few weeks in Vienna with the remaining partners of the nuclear agreement to see if the U.S. and Iran could reach an agreement on returning to the deal.
If the ongoing talks result in an agreement, it will be August at the earliest before Iranian barrels hit the market free of American sanctions, Amrita Sen, head of research at Energy Aspects, told Bloomberg Television in an interview on Wednesday.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com