HPCL to buy Ira­nian oil in Jan. af­ter six-month gap

Iran Daily - - Domestic Economy -

State-run In­dian oil re­finer Hindustan Pe­tro­leum Corp will buy Ira­nian crude in Jan­uary af­ter a gap of six months, with the na­tion’s over­all pur­chases from Tehran at 9 mil­lion bar­rels in the month, four in­dus­try sources said.

The United States in early Novem­ber granted In­dia a six-month waiver from sanc­tions against Iran’s oil ex­ports, Reuters re­ported.

Un­der the agree­ment, New Delhi can buy pur­chases to 1.25 mil­lion tons of Ira­nian crude oil, or 9 mil­lion bar­rels.

As part of the deal, HPCL will lift 1 mil­lion bar­rels of Ira­nian crude oil in Jan­uary, one source with knowl­edge of the mat­ter said, ask­ing not to be named due to the po­lit­i­cal sen­si­tiv­ity of Iran sanc­tions.

HPCL had halted Ira­nian oil pur­chases in July af­ter its in­sur­ance com­pany re­fused to pro­vide cov­er­age for the crude be­cause of US sanc­tions, although its chair­man said last month that HPCL may re­sume buy­ing Ira­nian oil un­der sanc­tions waivers.

In­dian Oil Corp, the coun­try’s top re­finer, will lift 5 mil­lion bar­rels of Ira­nian oil in Jan­uary com­pared to 6 mil­lion this month, while Man­ga­lore Petro­chem­i­cals Ltd. will buy 3 mil­lion bar­rels, an­other source said, also ask­ing not to be iden­ti­fied.

It was un­clear whether HPCL would con­tinue to buy Ira­nian oil on a reg­u­lar ba­sis dur­ing the waiver pe­riod.

HPCL had halted Ira­nian oil pur­chases in July af­ter its in­sur­ance com­pany re­fused to pro­vide cov­er­age for the crude be­cause of US sanc­tions, although its chair­man said last month that HPCL may re­sume buy­ing Ira­nian oil un­der sanc­tions waivers.

In­dian Oil Corp, the coun­try’s top re­finer, will lift 5 mil­lion bar­rels of Ira­nian oil in Jan­uary com­pared to 6 mil­lion this month, while Man­ga­lore Petro­chem­i­cals Ltd will buy 3 mil­lion bar­rels, an­other source said, also ask­ing not to be iden­ti­fied.

Mean­while, China’s Ira­nian oil im­ports are set to re­bound in De­cem­ber af­ter two state-owned re­fin­ers in the world’s largest oil im­porter be­gan us­ing the na­tion’s waiver from US sanc­tions on Iran, ac­cord­ing to in­dus­try sources and data on Refini­tiv Eikon.

Sinopec re­sumed Iran oil im­ports shortly af­ter Tehran’s big­gest crude buyer re­ceived its waiver in Novem­ber, while China Na­tional Pe­tro­leum Corp (CNPC) will restart lift­ing from its own Ira­nian pro­duc­tion in De­cem­ber, three sources with knowl­edge of the mat­ter told Reuters.

Reuters re­ported in Novem­ber that China’s waiver on US sanc­tions al­lows it to buy 360,000 bar­rels per day (bpd) of oil for 180 days.

Top Chi­nese en­ergy group CNPC, which has in­vested bil­lions of dol­lars in Ira­nian oil­fields, is ready to load its full share of pro­duc­tion from De­cem­ber, said an oil ex­ec­u­tive with di­rect knowl­edge of CNPC’S Iran ac­tiv­i­ties.

The ex­ec­u­tive, who asked not to be named, es­ti­mated CNPC will load at least two mil­lion bar­rels a month from De­cem­ber, dou­bling pre­vi­ous lev­els to help com­pen­sate for cuts made be­fore sanc­tions on Iran’s oil ex­ports went into ef­fect on Nov 5.

Be­fore the waivers had been an­nounced, Sinopec, Asia’s largest oil re­finer, had planned to stop load­ing Iran oil in Novem­ber, but re­sumed im­ports within days of get­ting the ex­emp­tion, a se­cond source said, also ask­ing to re­main un­named.

“We con­tin­ued lift­ing Ira­nian oil in Novem­ber be­cause we re­ceived the waiver,” the se­cond source said.

Sinopec and CNPC will likely use up the 360,000 bpd of Ira­nian oil im­ports al­lowed to China un­der the waiver.

An­other source said Ira­nian oil is “at­trac­tively priced” ver­sus ri­val sup­plies from the Mid­dle East.

For Novem­ber and De­cem­ber, Ira­nian Heavy crude sold to Asia has been priced at $1.25 a bar­rel be­low Saudi’s Arab Medium, a dis­count not seen since 2004.

The source also said many Chi­nese re­fin­ers were geared to­ward pro­cess­ing Ira­nian crude grades.

The rise in Ira­nian oil sup­ply and surg­ing pro­duc­tion from the United States, Rus­sia and OPEC coun­tries has pulled down crude oil prices by al­most a third since Oc­to­ber.

Ahead of the sanc­tions be­ing im­ple­mented in early Novem­ber, China’s crude oil im­ports from Iran fell to 1.05 mil­lion tons (247,260 bpd) in Oc­to­ber, the low­est since May 2010, Chi­nese cus­toms data shows.

Data from Refini­tiv Eikon, how­ever, shows that 2.77 mil­lion tons of Ira­nian crude were dis­charged into Chi­nese ports in Oc­to­ber, in­clud­ing into bonded stor­age tanks in Dalian.

By De­cem­ber, China’s Iran oil im­ports could reach al­most 3 mil­lion tons, the Eikon data showed.

A to­tal 2.51 mil­lion tons of Ira­nian crude were dis­charged into Dalian in Oc­to­ber and Novem­ber, ac­cord­ing to the data.

Other ma­jor Ira­nian oil buy­ers, in­clud­ing In­dia, South Korea and Japan, are also in­creas­ing or re­sum­ing orders.

REUTERS

Newspapers in English

Newspapers from Iran

© PressReader. All rights reserved.