Iraq replaces Iran as India’s second-largest crude supplier

Iraq replaced Iran as India’s second-largest crude oil supplier in the recently ended financial year, preliminary government data showed Wednesday, as New Delhi cut shipments from Tehran ahead of impending sanctions from the U.S. and the European Union, The Wall Street Journal reported.
Saudi Arabia remained the largest oil supplier, while Iran slid to fourth spot in the year ended March 31, according to the data compiled by India’s oil ministry.
India, which meets four-fifths of its crude oil needs through imports, has expedited its diplomatic efforts to increase purchases from countries such as Saudi Arabia, Qatar, Kuwait and Iraq to compensate for lower imports from Iran.
Globally, Iranian oil exports are declining as importers are cutting shipments ahead of U.S. sanctions that come into effect on June 28. Sanctions by the EU will start on July 1.
The U.S. has asked major oil importers such as India, Turkey, China, South Korea and Japan to drastically trim their purchases of Iranian oil or face sanctions on financial institutions that do business with Iran’s central bank.
Access to Iranian oil has been complicated by insurance and bank settlement obstacles set up by the West as part of efforts to block the Islamic Republic’s sales networks and force it to abandon an alleged program to develop nuclear weapons. Tehran, however, says its nuclear program is for peaceful purposes.
Shipments to India from Iran fell 5.7% in the last financial year to 17.44 million metric tons, or 349,300 barrels a day, the oil ministry data showed.
Imports from Iraq, meanwhile, surged 43% to 24.51 million tons, or 490,900 barrels a day. Purchases from Saudi Arabia rose 19% to 32.63 million tons, or 653,500 barrels a day, and from Kuwait climbed 54% to 17.67 million tons, or 353,900 barrels a day.
India insists that raising imports from other countries doesn’t signal it is bowing to U.S. pressure. It says it is trying to diversify its oil sources and reduce dependence on any one country.
Indian refiners have targeted to import about 15.5 million tons of crude oil from Iran in the current financial year, junior Oil Minister R.P.N. Singh said Tuesday.
New Delhi expects to boost shipments from Saudi Arabia by up to 100,000 barrels each year over the next few years, Oil Minister Jaipal Reddy said in February.
Oil imports by India are growing each year as the country’s refiners expand capacity to meet rising demand at home. India’s refining capacity is set to grow 46% to 6.23 million barrels a day by March 2017, Oil Secretary G.C. Chaturvedi said on April 16.