India set to buy oil from Iran in November despite U.S. sanctions

India will buy a total of 9 million barrels of oil from Iran in November, Reuters reported last week, citing an industry source, suggesting that India will continue to purchase Iranian crude even after the U.S. sanctions on Tehran return early next month.

Indian Oil Corp will buy 6 million barrels of Iranian oil and Mangalore Refinery and Petrochemicals will purchase another 3 million barrels next month, Reuters’s quoted a source with knowledge of the plans as saying.

Last week, a Bloomberg report had said that India wasn’t planning to purchase any Iranian oil in November, suggesting that India may have bowed to U.S. pressure to halt crude oil imports from Iran.

India is Iran’s second-largest single oil customer after China and was expected to cut back on Iranian oil purchases, but unlikely to cut off completely the cheap Iranian oil that is suitable for its refineries.

India wants to keep importing oil from Iran, because Tehran offers some discounts and incentives for Indian buyers at a time when the Indian government is struggling with higher oil prices and a weakening local currency that additionally weighs on its oil import bill.

But the U.S. continues to insist that it expects Iranian oil buyers to bring their purchases down to zero.

“We have told the Indians consistently, as we have told every nation, that on November 4th the sanctions with respect to Iranian crude oil will be enforced, and that we will consider waivers where appropriate, but that it is our expectation that the purchases of Iranian crude oil will go to zero from every country, or sanctions will be imposed,” U.S. Secretary of State Mike Pompeo said last month after meeting with top Indian officials to discuss Iran’s oil.

In September, Indian refiners were said to be cutting loadings for September and October, to less than 12 million barrels each month, which would be nearly half of what they imported earlier this year.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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