Indian Oil looking for annual deal to buy U.S. Oil

Indian Oil Corp, the country’s top refiner, is looking for an annual deal to buy U.S. crude as it seeks to broaden its oil purchasing options, its chairman said, amid uncertainties over imports from Iran.

Washington in November granted a six-month waiver to New Delhi from sanctions against Tehran and restricted India’s monthly intake of Iranian oil to 1.25 million tonnes or 300,000 barrels per day.

Sanjiv Singh told reporters IOC has not yet finalised from which company it would buy U.S. oil.

“When we go for term, it should have price advantage for us and strategic advantage for us apart from supply sureties. So considering these three we will work out volumes also,” he said.

India Oil had previously purchased U.S. oil from spot markets and signed a mini-term deal in August to buy 6 million barrels of U.S. oil between November to January.

IOC is the top Indian buyer of Iranian oil with an annual contract for 180,000 bpd in the fiscal year ending March 2019.

Singh said his firm buys Iranian oil because of competitive prices and attractive terms and conditions. Iran offers extended credit periods and almost free shipping on oil sales to India.

He said IOC was in talks to renew an annual oil contract with Iran but a new any deal would depend on conditions attached to a subsequent waiver from the U.S. sanctions.

“The earlier waiver was for the existing contract, (for a new contract) we will have to work it out,” he said.

Meanwhile, the refiner has signed a deal with Iraq to buy 360,000 bpd of oil, including up to 500,000 bpd of Basra Heavy, in 2019 compared with 356,000 bpd last year.
Source: Reuters (Reporting by Nidhi Verma; editing by David Evans)