India’s oil imports from Iran drops in December

Under US pressure

NEW DELHI, Jan 13, (RTRS): India’s oil imports from Iran fell by 41 percent in December to 302,000 barrels per day oil (bpd), ship tracking data reviewed by Reuters showed, as pressure from US sanctions took effect.

The United States introduced tough sanctions aimed at crippling Iran’s oil revenue-dependent economy in November but gave a six-month waiver to eight nations, including India, which allowed them to import some Iranian oil.

India is restricted to buying 1.25 million tonnes per month, some 300,000 bpd. December imports from Iran were 9.4 percent higher than November when some cargoes were delayed due to lack of ships, the tanker arrival data showed.

Iran was the sixth biggest oil supplier to India in December compared to third position it held a year ago and last month Tehran’s share of India’s overall imports declined to 6.2 percent from 11.7 percent a year ago, the data showed.

After abandoning the 2015 Iran nuclear deal, US President Donald Trump is trying to end Tehran’s nuclear ambitions and ballistic missile programme and curb its support for militants in Syria, Yemen, Lebanon and other parts of the Middle East.

In 2018 India shipped about 13 percent more oil from Iran at 531,000 bpd as refiners boosted purchases ahead of the US sanctions drawn by discounts offered by Tehran, the data showed.

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 last year, and had offered almost free shipping and an extended credit period to boost sales to India.

Dispute

In the previous fiscal year that ended on March 31, 2018 India refiners had cut purchases from Iran due to a dispute on the award of development rights of a giant gas field.

Government sources say Reuters’ calculations showing India’s oil imports from Iran in this fiscal year would be higher than the 452,000 bpd, or 22.6 million tonnes, it imported in the previous year, are correct.

In April-December 2018, the first 9 months of this fiscal year, India’s oil imports from Iran averaged about 533,800 bpd, up about 22 percent from a year ago, the data showed.

India’s total oil imports in December were about 4.9 bpd, up about 15 percent from a year ago, the data showed.

India’s Nayara Energy, partowned by Russian oil major Rosneft, shipped in 21 percent more oil in December than in November as it restarted itsrefinery after a month-long maintenance shutdown, according to data from the shipping industryand sources. Under pressure from U.S. sanctions, Nayara has stopped importing Iranian oil from Novemberand has turned to Iraq and Oman, the data showed. Iranian Oil Minister Bijan Zanganeh has previously said that because of US sanctions,India had refused to allow a Russian-owned Indian refinery to use Iranian crude oil that Indiahad obtained under waivers. Nayara had closed its 400,000-bpd Vadinar refinery in the western state of Gujarat from Nov 21 for one month to carry out maintenance. The sources declined to be identified as they were not authorised to speak with media.

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India’s central bank has asked lenders of Infrastructure Leasing and Financial Services Ltd (IL&FS) to classify loans extended to the bankrupt shadow banking firm as non-performing, two sources with direct knowledge of the matter told Reuters on Tuesday.

While the Reserve Bank of India’s (RBI) decision does not come as a big surprise, it means IL&FS’s lenders will have to set aside additional capital to provision for the soured loans.

Bad loans at Indian banks reached a record $150 billion at the end of March, with state-run banks accounting for the lion’s share. The huge pile of bad debt has hurt the bottom lines of staterun banks and hindered their ability to issue new loans.

In October, India took control of IL&FS, after a string of defaults on debt obligations by the infrastructure financing and construction company spooked domestic markets.

IL&FS, which has a total debt of 910 billion rupees ($12.97 billion), has been trying to sell its assets to repay debt after several defaults forced the government to overhaul its management.

Government-owned firms, including Life Insurance Corp of INDIA and State Bank of India, own nearly 40 percent of the company. Japan’s Orix Corp has a 23 percent stake and Abu Dhabi Investment Authority 12 percent.

Apart from State Bank, its other INDIAn lenders include Bank of Baroda, Punjab National Bank, and Union Bank of India, among others.

One of the sources said the RBI told the lenders to book the loans to IL&FS as non-performing assets in the December quarter. The second source said the RBI’s decision was conveyed to banks on Tuesday.

The RBI did not respond to an email seeking comment. SBI and other lenders were not immediately reachable for comment.