Private sector halting oil imports from Iran
Private companies have not booked any oil cargo from Iran.
Both the companies are in the list of the four largest buyers of Iranian oil in India.
A source close to the shipping lines told The Sunday Guardian: “In order to avoid the wrath of US sanctions and protect their business interests in the US, oil firms, namely Reliance Industries and Nayara Energy, have not booked any oil containers from Iran for November.”
The sources also informed this newspaper that Reliance Industries, one of the country’s major Iranian oil importers, has already halted its oil import from Octo- ber this year.
Reliance Industries’ decision not to import oil is likely to be a big blow to Iranian oil exports to India as the company owns the world’s biggest refining complex and has a major share in the total oil imports from Iran, according to industry experts.
“The container tracking data clearly shows that Reliance Industries had imported 2 million barrels of Iranian oil in September, but it has not booked any oil cargo for October-November. The company’s decision to halt purchase of Iranian oil from October came after the in- surer of Reliance Industries’ oil imports had cautioned it,” the same source cited above said.
This reporter had sent a mail to Reliance Industries, seeking the company’s comment on the oil import cut; however, the response is still awaited.
However, according to another source close to the Shipping Corporation of India (SCI), state-owned oil companies, namely the Indian Oil Corporation Limited (IOCL) and Mangalore Refinery and Petrochemicals Ltd ( MRPL), have booked cargo of 1.25 million tonnes of oil from Iran for import in November.
The SCI works as a carrier of state-owned oil companies—IOCL and BPCL—for importing oil from Iran. Earlier, speaking to the media, Petroleum Minister Dharmendra Pradhan had said that the Centre will explore all possible measures to ensure that oil imports from Iran continue.
“The Centre is working at the possibility of reviving the rupee-rial arrangement that was functional before the US sanctions were lifted. The move will facilitate buyers a smooth shipping of oil from Iran to India,” the SCI source said.
India is the second-largest buyer of Iranian oil, having imported an average of 577,000 barrels a day this year, as per tracking data available for oil shipments.
Effective from 5 November, secondary sanctions related to Iran’s port and shipping sector, petroleumrelated purchases from Iran, transactions with Iran’s Central Bank and other Iranian financial institutions, the provision of specialised financial messaging services, the provision of insurance, and engagement or investment in Iran’s energy sector, will be re-imposed. Nifty index held its negative bias for the week gone by and settled around the psychological mark of 10,000, down by over 2.5%. There was a lack of buying interest by traders, amid the negative sentiment prevailing in the economy. Stocks of NBFC, Housing Finance and PSU banks are bearing the brunt of heavy selling by market men. The Central government’s fiscal deficit touched 95.3% of its full year target during the first half (April to September) of the current financial year. Meeting the fiscal deficit target of 3.3% of GDP will be very difficult and challenging as indirect tax collections have come in below expectations. Likewise, disinvestment targets have not been met and the Centre has released 90% of its full year subsidy in the first half of the current financial year. Markets have been hitting new lows every week on the back of relentless selling by foreign portfolio investors. It is the third time that foreign portfolio investors have built up massive short positions in the Nifty index to more than one crore contracts. Data suggests that whenever this has happened on previous occasions, the index has rallied by 6%-7% in the following months. Fund managers and analysts alike are advising investors and clients to invest in a staggered manner during the next few months as rewards could be greater over the long term. Relatively safer sectors like pharmaceuticals, information technology and consumption are being favoured by fund managers for the time being. In the pharmaceutical space, Dr Reddy’s stock looks attractive from the medium term horizon as it has posted a healthy set of numbers for the second quarter of the current financial year of 2018-19. This has been primarily driven by new launches in India and an improved performance in the emerging markets. On a year on year basis, the company’s consolidated net profit for the September quarter grew by 77% to Rs 504 crore, against Rs 285 crore for the same quarter as of last year. Similarly, the consolidated total revenue grew by 7% to Rs 3,798 crore for the September quarter as against Rs 3,546 crore during the corresponding quarter of the last fiscal. The domestic business of the company has been contributing 18% of the total revenue and has been doing reasonably well on the back of new product launches and improvement in the base business. While the revenue grew by 8% for the second quarter, Dr Reddy’s expects it to grow in double digits for the current financial year 2018-19. Notable was revenue from emerging markets growing by 36% year-on-year, driven by improved volumes and margins. The management has also indicated recently that it will be focusing on resolving pending regulatory issues and continue to work on execution and cost optimisation measures. The Dr Reddy’s stock currently quoting at Rs 2,400 can be bought in small quantities for a 20% price appreciation in the next six months. Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.