Reliance to stop Iranian oil imports from November if US sanctions kick in
Reliance Industries, which operates the world’s largest single-location refinery processing about 1.4 million bpd, said it will stop Iranian crude imports from November if the US sanctions kick in.
It also said this won’t lead to supply disruption as it sources a very small quantity of its total crude imports from Iran now.
According to sources, RIL’s oil imports from Iran had surged by about 45 per cent to 67,000 bpd in 2017 after it began sourcing crude from the country in April 2016 and in the January-April 2018, it imported about 96,000 bpd.
Trade sources said recently RIL booked about 8 million barrels of US crude following the threat to re-impose sanctions.
India is the second largest importer for Iranian crude after China.
“Our shipment from Iran has come down to much smaller portion of our overall imports now. And by November our thinking could be to comply with the sanctions,” V Srikanth, RIL’s group deputy chief financial officer told reporters.
Without elaborating further and disclosing how much it imports from Iran now, he ruled out the possibility of supply disruptions. “We source from all over the world and there are plenty of other crudes available in markets like Iraq and Saudi Arabia, among others,” he said.
The US, in March this year, unilaterally withdrew from its 2015 nuclear deal with Tehran and re-imposed economic sanctions on the country. It also threatened to penalise other countries dealing with Iran from November.
RIL began to import crude from Iran in April 2016 after a six-year hiatus after the then US government sewed up nuclear deal with Tehran. At its peak, RIL used to source as much as 5 million tonne a year from Iran.
Bowing to international pressure to isolate Iran over its nuclear programme, RIL had in January 2009 stopped exporting petrol to Iran and from February 2010, it had stopped buying crude from it as well.
RIL, which has substantial investments in US shale gas projects, besides being a big supplier of fuel, cannot afford to overlook the sanctions. It also has other telecom businesses in the US.
RIL exports most of its 62 million tonne output from the Jamnagagr refinery, making it the single largest source of export earnings for the nation. It ships petrol to the Middle East, the US, Southeast Asia and Australia while diesel is exported to Europe, Africa, Southeast Asia.
RIL’s statement assumes importance as so far the official government position has been that it will follow the national interest.
Yesterday media reports said Iran was reportedly planning to provide ships as well as insurance cover to continue exporting crude to India.
Earlier this month, Hindustan Petroleum had cancelled Iranian oil cargo after it faced insurance issues.