Oil’s fastest growing buyer guzzles Iran crude

India’s refiners were forced to slash Iranian oil purchases during earlier sanctions

The world’s fastest growing oil consumer is guzzling down Iranian crude before US sanctions start squeezing supplies from the nation.

India imported 771,000 barrels of crude oil a day from Iran in May, a 35 per cent increase from the previous month, tanker tracking and shipping data show. That pushed the Islamic republic up the ranks as the secondbiggest supplier to the Asian nation, overtaking Saudi Arabia. Iraq retained the top spot.

There’s “a ratcheting up of competition among suppliers to capitalise on the Indian market as the country’s demand for oil grows,” said Abhishek Kumar, senior analyst at Interfax Global Energy in London.

India, which imports over 80 per cent of its oil, is attracted to Iran’s crude largely due to geographic proximity, as well as the favourable financial terms, including the longest credit period among all of India’s suppliers. Refiners in India were quick to ramp up imports from Tehran after the previous round of sanctions were lifted in 2015.

India’s refiners were forced to slash Iranian oil purchases to about half their previous levels during the earlier sanctions before the landmark accord to curb the Islamic republic’s nuclear programme was struck between world powers in 2015.

This May, Indian Oil Corp, the nation’s biggest refiner, boosted its crude purchases from the Middle East producer seven-fold. “No one knows what’s going to happen” with the sanctions this time, said R. Ramachandran, the head of refineries at Bharat Petroleum Corp, India’s secondbiggest state-run refiner.

“But people are conscious and maybe acting according to what they anticipate as coming.”