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Iranian oil imports dip 25 pc in June

Press Trust of India  |  New Delhi 

India's imports from showed a decline of over 25 per cent in June, but some shipments loaded last month are expected to arrive this month, government and industry officials said today.

After scaling imports to around 770,000 barrels per day in May, imports from were down to 570,000 bpd in June as considers acquiescing to US Donald Trump's demands for ending imports from by November 4.

Officials said actual shipment reaching Indian shores has shown a decline but some of the that was loaded in June arrived this month and has not been accounted for in the June numbers.

While says it does not recognise unilateral restrictions imposed by the US on any country and instead follows UN sanctions, have been asked to be prepared for channels to pay for Iranian oil getting blocked by November, following sanctions against the nation, they said.

Russia's Rosneft-based and private sector as well as state-owned (IOC) showed lesser Iranian purchases, but and Petrochemicals Ltd (MPRL) sourced more oil.

Imports from Iran, which currently is India's third largest supplier of oil after and Saudi Arabia, are likely to come down gradually and will have to be replaced with more purchases from countries like and Kuwait, they said, adding imports from Iran after November 4 will be possible only if Iran accepts alternates like rupee payments.

The is piling pressure on India, China, and other buyers to end all imports of Iranian oil by a November 4 deadline as it looks to choke the state's economic lifeline with sanctions over its nuclear programme.

The US, which in May pulled out of a landmark nuclear deal and said sanctions will be re-imposed on Iran within 180 days, has threatened to cut off access to the American system for foreign financial institutions that trade with Iran.

This means India, Asia's second-largest importer after China, will have to give up the euro payment mechanism for Iranian crude imports from November when US sanctions against Iran come into force.

But, it still could continue imports if Iran accepts an alternative payment or offers a longer credit period.

of (SBI), the country's largest lender, has communicated to that the euro payment route will be not available after November 3. The current payment mechanism involves Indian refiners transferring funds to SBI when they use Germany-based to pay euros to Iran.

During the first round of sanctions in 2012 when (EU) joined the US in imposing financial restrictions, initially used a to pay Iran for the oil it bought but beginning February 2013 paid nearly half of the in rupees, while keeping the remainder pending till opening of payment routes.

It began clearing the dues in 2015 when the restrictions were eased.

Besides, had sought to get around the restrictions by supplying goods, including wheat, soybean meal and to Iran in exchange for oil.

Back in 2012, EU put restrictions on insurance of Iranian oil and ships carrying them. To get around the problem, Iran supplied oil in its own tankers.

Iran supplied 18.4 million tonnes of during April 2017 and January 2018 (first 10 months of 2017-18 fiscal).

Iran was India's second biggest supplier of after till 2010-11 but western sanctions over its suspected nuclear programme pushed it to the 7th spot in the subsequent years. Sourcing from Iran increased following the lifting of sanctions.

Iranian oil is a lucrative buy for refiners as the nation provides 60 days of credit for purchases, double the amount of time given by other producers.

Following Trump's announcement, companies are not allowed to strike new deals in the Iranian oil and

By August, transactions in debt or currency and purchases involving the country's automobile sector or Iranian gold and other metals must end. In November, deals involving Iran's oil and energy sector, shipping and ports, and will be prohibited.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, July 11 2018. 16:55 IST