Saudi Arabia's Price Increase Could Indicate Oil Price Floor
Iran has overtaken Saudi Arabia as India's number two oil supplier in the April-June quarter, India's oil minister said on Monday. Iraq remains India's number-one supplier of crude.
While Iran ousted Saudi Arabia as the number two oil supplier, Iran's oil shipments to India year over year are down. Iraq's, on the other hand, have increased, perhaps as India looks to wind down shipments ahead of US sanctions on Iran that go into effect in November 2018.
In the period from April to June, India purchased 5.22 million tons of oil from Saudi Arabia, 5.6 million tons from Iran, and 7.27 million tons from Iraq.
But yearly figures (which run from April to March) show a decline in the amount of oil India imported from Iran: 9.8 million tons in the year ending March 2018, versus 13.04 million tons in the year ending March 2017-an almost 25 percent decline year over year.
Meanwhile, India's oil imports from Iraq increased from 24.79 million tons in the year to March 2017 to 29.66 in the year to March 2018-a near 20% increase year over year.
India has not yet definitively said how it will respond to the US sanctions on Iran when it comes to oil imports and payments. It has waffled over the matter, initially reporting in May that it will not adhere to US sanctions, and then switching gears and telling its refiners to prepare for a "drastic reduction to zero" of Iranian oil.
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India's position as an oil importer from Iran turned even more difficult in mid-June, when India's largest bank told local refiners that it would no longer handle payments for oil imports from Iran starting in November.
India's Nayara Energy-formerly known as Essar Oil-is said to have started scaling back oil purchases from Iran last month, while another big Indian refiner, Reliance Industries, which owns the world's largest refining hub and has significant exposure to the U.S. financial system, is reportedly planning to stop importing oil from Iran in October or November.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More