Deadly Israeli airstrikes pound Gaza as Doha talks raise hopes for ceasefire    Egypt accelerates coastal protection projects amid rising climate threats    Egypt's PM calls Israeli war on Gaza 'most dangerous crisis' at BRICS summit    Egypt's FinMin urges BRICS to support debt sustainability    Egypt's gold prices up on July 6th    Venezuela vows to uphold sovereignty on 214th independence anniversary    ADIB Egypt publishes second sustainability report for 2024    Egypt, Saudi FMs discuss Gaza truce, Iran-Israel tensions    Over 215,000 projects funded under Mashrouak, exceeding EGP 33bn in May: Minister    Egypt, Norway hold informal talks ahead of global plastic treaty negotiations    Greco-Roman tombs with hieroglyphic inscriptions discovered in Aswan    UN conference cites Egypt's 'NWFE' programme as model for development finance    Global tour for Korean 'K-Comics' launches in Cairo with 'Hellbound' exhibition    China's factory output expands in June '25    Philip Morris Misr announces new price list effective 1 July    Egypt teams up with private sector to boost university rankings    Egypt reveals heritage e-training portal    Three ancient rock-cut tombs discovered in Aswan    Egypt condemns deadly terrorist attack in Niger    Egypt's FM, China's Wang discuss Iran-Israel escalation    Egypt's EHA, Schneider Electric sign MoU on sustainable infrastructure    Sisi launches new support initiative for families of war, terrorism victims    Grand Egyptian Museum opening delayed to Q4    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Egypt's EDA joins high-level Africa-Europe medicines regulatory talks    Egypt's Irrigation Minister urges scientific cooperation to tackle water scarcity    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    Egypt's Democratic Generation Party Evaluates 84 Candidates Ahead of Parliamentary Vote    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Cabinet approves establishment of national medical tourism council to boost healthcare sector    Egypt's PM follows up on Julius Nyerere dam project in Tanzania    Egypt's FM inspects Julius Nyerere Dam project in Tanzania    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



India may not be able to cut Iranian oil imports despite U.S. sanctions
Published in Amwal Al Ghad on 08 - 09 - 2018

United States' demand for countries to cut all Iranian oil imports is going to be a massive headache for India.
As the world's third-largest oil importer and the second-largest buyer of Iranian crude after China, complying with the U.S. sanctions — enacted following President Donald Trump's withdrawal from the 2015 Iranian nuclear deal — will require India to find new sources of crude at a higher cost.
At a time of rising oil prices globally and a weakening national currency amid an emerging markets sell-off, this is going to hurt.
Washington may grant waivers for major importers of Iranian crude but still expects them to ultimately comply with sanctions, top U.S. officials said. Discussions on the issue, as well as on security issues and trade more generally, took place Thursday as the U.S. Secretaries of Defense and State, James Mattis and Mike Pompeo, met with their Indian counterparts in Delhi.
“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. So we'll work with the Indians, we committed that we will do that,” Pompeo told press at the summit.
India imports 70 percent of its energy needs, and fuel costs are hitting multi-year highs in the rapidly growing country of 1.3 billion people. And the rupee fell to a record low against the dollar this week as rising global interest rates and trade war fears rock emerging market currencies across the board. This, combined with the elimination of a major source of cheap crude, could have significant impacts on India's inflation and economic growth.
“We want to make the point that India is heavily reliant on oil imports for its consumption needs and 83 percent of its oil comes from external sources,” one Indian official was quoted as saying in local Indian newspaper The Economic Times. Other senior officials have said outright that the country will not fully cut their Iranian imports and that doing so would be impossible.
Discount Iranian crude
In an attempt to cling onto its trading partners, Iran is providing significantly cheaper oil than any of its competitors, as well as offering extended credit terms and practically free shipping. Its proximity to India also helps reduce transport costs.
What's more, many Indian refiners are configured to process Iranian oil — this means they can't switch to other suppliers easily.
The U.S. State Department set a deadline of November 4, and although it's suggested the possibility of temporary waivers, still intends to impose secondary sanctions countries that do not comply.
Delhi will therefore be forced to turn to other producers to meet their energy needs. Washington has offered to replace the loss of supply with U.S. oil, but those shipments will be more expensive than those from nearby Iran.
“My personal opinion is that it will be very difficult for India and other buyers of Iranian crude to halt all imports,” said Stephen Brennock, oil analyst at PVM Oil Associates in London. “That said, if recent evidence is anything to go by, shipments will have fallen significantly by the time we reach the November 4 deadline.”
Finding new partners
Indeed, India's August oil imports from Iran were down 32 percent on the prior month to 523,000 barrels per day (bpd), according to primary tanker arrival data. Still, that was 56 percent higher than the same month last year, due largely to the dramatic discounts offered by Tehran since the sanctions were announced.
Other likely options to replace Iran's oil include Saudi Arabia and Iraq. As for the U.S., Energy Information Administration (EIA) data reveal that U.S. crude exports to India reached a record high of 413,000 bpd in June. “It is fair to say that this blossoming love affair will strengthen as U.S. sanctions on Iran take effect,” Brennock said.
While some analysts see the changes having a major impact on India's economy, Brennock believes they will be manageable.
“Indian refiners will face slightly higher input costs given that their access to attractively-priced Iranian crude will be limited. Even so, I don't see this having a major impact on its broader economy,” he said.
Still, any palpable rise in energy costs for India's burgeoning population will be problematic for the government — especially as it seeks to appease an increasingly frustrated consumer base ahead of general elections next year.
Source: CNBC


Clic here to read the story from its source.