India Will Buy Oil From Iran In November, Says Petroleum Minister

India Will Buy Oil From Iran In November, Says Petroleum Minister

Iran's crude exports fell further in the first week of October, according to tanker data and an industry source, taking a major hit from USA sanctions and throwing a challenge to other OPEC oil producers as they seek to cover the shortfall. Of the 220.4 million metric tonnes (million MT) of crude oil imported by India in 2017-18, about 9.4 per cent, was from Iran.

The announcement, the first indication Washington was considering such waivers, followed a Reuters report that India planned to lift some Iranian oil in November although it has been cutting back on Iranian imports recent months.

US Secretary of State Mike Pompeo last month said that on November 4th the sanctions against Iran will be enforced and that the US will consider waivers for countries that bring their Iranian oil purchases down to zero.

"Likely, India and Iran will agree to use Rupee payments instead of U.S. dollar payments, something already tried between 2013 and 2015, with Iran then using Rupees to import food, medicines and other commodities from India", said Leszczynski.

In August, Trump reimposed economic sanctions against Tehran and said that anyone doing business with Iran would not be doing business with the US.

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Worldwide benchmark Brent crude oil futures LCOc1 were at $83.26 per barrel at 0352 GMT, down 90 cents, or 1.1 percent, from their last close.

Alongside potential waivers on Iranian sanctions, oil supply is seemingly back on the rise with Libya recently boosting oil production to 1.25mbpd (200kbpd more than the September average).

Furthermore, Leszczynski says that if India were to stop or significantly reduce imports from Iran, it would complicate the strategic relationship it is trying to build between the two countries. And Saudi Arabia and OPEC and non-OPEC countries, they've produced 1.5 million barrels a day.

Pradhan said he had spoken to Saudi Oil Minister Khalid al-Falih two day earlier about the June decision by OPEC and major oil producers to add 1 million bpd to the oil market.

Iran's Oil Minister Bijan Zanganeh on Monday called a Saudi claim that the kingdom could replace Iran's crude exports "nonsense". Global crude oil prices had reached a record high of $147 per barrel in July 2009. The Indian basket represents the average of Oman, Dubai and Brent crude. It added that the effective reversal of fuel price deregulation would also constrain future private sector investments in the sector.

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