State refiners drive India's July Iran oil imports to a record: trade sources

By Nidhi Verma

NEW DELHI (Reuters) - India's monthly oil imports from Iran surged by about 30 percent to a record 768,000 barrels per day (bpd) in July, as state refiners' intake surged ahead of U.S. sanctions in November, preliminary tanker arrival data obtained by Reuters showed.

The shipments also include some parcels that were loaded in June and arrived in India last month, the data obtained from trade sources showed.

July volumes were about 85 percent higher than year ago shipments of about 415,000 bpd, the data showed.

State refiners that had cut imports from Iran in 2017/18 due to a dispute over development rights of a giant gas field, have tied up significantly higher volumes for this fiscal year that began in April, drawn to the discounts offered by Iran.

Tehran had offered almost free shipping and an extended credit period for oil sales to India, its top oil client after China.

Iran was hoping to sell more than 500,000 bpd of oil to India in 2018/19, its oil minister Bijan Zanganeh said in February.

State refiners accounted for about four-fifth of Iranian oil imports in July with Indian Oil Corp along with its unit Chennai Petroleum Corp getting about 300,000 bpd oil from Tehran, the preliminary data showed.

In April-July, the first four months of this fiscal year, India's oil imports from Iran has risen by an annual 40 percent to about 677,500 bpd, the data showed.

Purchases from Iran could slow from August as imports from Tehran are getting tougher after the United States in May pulled out of a 2015 nuclear deal and announced the renewal of sanctions against Tehran.

Some sanctions will take effect from August 6 while others, notably on the petroleum sector, will take effect on Nov 4.

Last month, state-run Hindustan Petroleum had to cancel an Iranian oil shipment as insurers were not willing to provide cover for its two refineries for processing Iranian oil, sources with knowledge of the matter said.

HPCL will not buy Iranian oil in August, its chairman M. K. Surana said on Tuesday, and did not comment if the company would resume buying Iranian oil from next month.

To keep its shipment flowing Iran has offered insurance for oil cargo and ships to supply oil to India, its top oil client after China.

In January-July, India's oil imports from Iran rose by more than 17 percent to about 612,000 bpd, the data showed.

(Reporting by Nidhi Verma; Editing by Alexandra Hudson)