Iran sweetens the deal to up Indian crude imports

Offers add oilfields, new routes for pipeline & insurance to refiners

Indian refinery cutting crude could hike diesel prices in India.
Indian refinery cutting crude could hike diesel prices in India.

Iran on Monday offered oilfields on lucrative terms, expressed willingness to route a gas pipeline through sea to avoid Pakistan and insurance to refiners to help India make a decision into buying more oil from Teheran, reported the Indian press. 

Iranian oil minister Rostam Ghasemi made these offers, the reports said, at his meeting with the Indian petroleum minister Veerappa Moily.

India has reduced its crude purchase from Iran from 18 million in 2011-2012 to 13 million tonne in 2012-13, owing to international sanctions. 

Sanctions imposed by the United States and Europe have halved Iran's oil exports  last year, costing it $5 billion a month in lost revenue.

The Indian imports are slated to further fall to 11 million tonne, with Mangalore Refinery and Petrochemicals Ltd, which bought 3.9 million tonne of Iranian oil in 2012-13, not importing any shipload so far this fiscal.

A report in the Indian newspaper, Economic Times, said during the talks, Iran offered insurance cover to refineries though Indian side was sceptical how such an arrangement could work in the absence of any financial intermediary.

Sources, the paper said, told that Tehran was willing to re-route the Iran-Pakistan-India gas pipeline through an under-sea route to avoid going through Pakistan. New Delhi has refused to join the pipeline over concerns of safety of the line in Pakistan. 

It is unclear at this stage, if India will get a waiver from the United States on the Iranian crude import. India is Iran's second-largest buyer, taking around a quarter of its oil exports worth around $1 billion a month. If India were to completely stop importing, it will be a huge blow to the Iranian economy. 

 

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