No issues with oil supplies, sentiment hurting price: Govt

US sanctions against Iran

NEW DELHI: Ahead of the US sanctions against Iran, India Tuesday said the availability of crude oil to replace lost volumes is not an issue but the “sentiment” around losing a big oil supplier is driving prices higher.

Refusing to say if India has sought a waiver of sanctions from the US as to continue purchasing crude oil from Iran, Oil Minister Dharmendra Pradhan said he had articulated the country’s position on importing oil from the Persian Gulf nation in November and “there is nothing new to repeat.”

Last week, Pradhan said two state-owned oil refiners had booked import of 1.25 million tonne (MT) of crude oil from Iran in November.

US President Donald Trump in May withdrew from the 2015 nuclear accord with Iran, reimposing economic sanctions against the Persian Gulf nation.

Some sanctions took effect from August 6, while those affecting the oil and banking sectors will start from November 4. Those sanctions would block banking channels, making payment for oil bought from Iran hard as well as stop re-insurance cover to refineries processing such crude.

“There is no issue of availability of crude oil today. But due to geopolitical uncertainty in different parts of the world, there is a sentimental issue. That is the primary challenge,” Pradhan told reporters on the sidelines of India Energy Forum here. “From day one, we are confident that there is no problem in sourcing of crude. There is plenty available in different parts of the world.”

Oil prices hit a four-year high of USD 86.74 a barrel earlier this month as the market grapples with the expected loss of Iranian exports due to the US sanctions.