India’s oil imports from Iran increased by some 5 per cent between March 2018 and March 2019 compared to the previous fiscal year through March 2018, because Indian refiners rushed to buy Iranian oil before the U.S. sanctions kicked in in November and hurried to wind up purchases ahead of the waiver expiring early next month.
According to preliminary data for tanker arrivals, obtained by Reuters from industry and shipping sources, India’s imports of Iranian oil rose to around 479,500 bpd in the 2018/2019 Indian fiscal year ended last month, compared to some 458,000 bpd that Indian refiners imported in the 2017/2018 fiscal year.
Between April and October 2018, India’s refiners were buying more than usual Iranian oil because none of Iran’s oil customers were certain that it would get a U.S. sanctions waiver to continue purchases from Iran after the sanctions were re-imposed in early November 2018.
Another major reason for increased Indian buying of Iranian oil before November was that Iran was offering very attractive terms to Indian buyers, including almost free shipping and an extended credit period for payment.
India, along with seven other Iranian oil customers including the biggest buyer China, received a U.S. waiver to continue buying Iranian oil, at a rate of around 300,000 bpd. Although not all Indian refiners continued purchases because private companies with exposure to the U.S. financial system were wary of secondary sanctions if they buy oil from Iran, India used up its 300,000 bpd quota allowed under the current exemption.
According to data obtained by Reuters, India’s imports of Iranian oil jumped to 405,000 bpd in March 2019, up by 56 per cent from February 2019. Refiners want to make sure they wind down payments before the waivers expire, while a shortage of ships moved some cargo loadings to the end of February with arrival in India in March. India is not booking Iranian oil to load in May 2019, as refiners are waiting for more clarity from the U.S. on whether India will get its sanctions waiver extended, Reuters reported earlier this week.