Ayush
SENIOR MEMBER
- Joined
- Dec 5, 2012
- Messages
- 7,805
- Reaction score
- -2
- Country
- Location
New Delhi: Iran is offering free delivery of crude to major
client India, industry sources said, signalling that tough
Western sanctions which have slashed its exports in half
are driving Tehran to increasingly desperate measures to
keep oil flowing.
The US has yet to ease the pressure on Asian buyers to
continue reducing purchases from the Opec member, even
though Iran and world powers began two days of talks on
Thursday hoping to reach a “first step” towards ending the
decade-old standoff over Tehran’s disputed nuclear
programme.
The drop in exports is costing Iran billions of dollars in lost
revenue every month. Tehran is also unable to repatriate
most of the money earned from oil it does manage to sell,
as the sanctions have cut off bank transfer facilities,
crippling its economy by choking off its biggest revenue
stream.
Despite the near halt of petrodollar payments, Iran is
resorting to measures such as offering deep discounts on
oil and now free delivery to India, according to sources who
requested anonymity because of the sensitivity of the issue.
Iran’s remaining Indian clients — Mangalore Refinery and
Petrochemicals Ltd, Essar Oil and Indian Oil Corp — could
save freight of 70 cents to $1 a barrel on purchases from
Iran, said one of the sources.
Tehran is also offering Indian buyers a discount on price if
refiners raise purchases, the sources said.
“The more you buy, the more incentives you get. If a refiner
buys 30 million barrels of Iranian oil in a year then the
discount translates to 25 cents per barrel,” this source
added.
Iran already offers 90 days’ credit on crude sales to Indian
refiners while most other producers stick to 30 days’ credit.
While any discount would be attractive as India tries to curb
an oil import bill that was around $170 billion (Dh624
billion) in 2012/13, it likely would be wary of raising
imports just prior to a review of its waiver from US
sanctions.
India’s six-month exemption comes up for renewal in early
December, shortly after top US energy diplomat Carlos
Pascual’s current visit to New Delhi.
Sources have said the US is unlikely to allow Iran’s exports
to rise before a deal is struck with Tehran. Both sides
involved in the Geneva talks have said a breakthrough was
far from certain.
India so far looks well on track to meet US conditions to
renew its waiver. Daily imports from Iran slid 34 per cent in
June-September from the six months between December
2012 and May 2013, data from trade sources shows.
India is one of Iran’s few remaining clients along with other
Asian buyers China, Japan and South Korea.
In India, there is about $5.3 billion of Iranian oil money held
up by the sanctions. Of the total, about $1.8 billion is with
the oil companies who have bought crude from Iran and the
remainder is held with a bank, sources said.
In South Korea, total Iranian money stuck in bank accounts
is more than $5 billion, a source with direct knowledge of
the matter said.
In Japan, a similar amount of Iranian oil money has been
held up since the beginning of the year, according to
sources.
gulfnews.com/news/world/india/iran-offers-to-ship-crude-to-india-for-free-1.1252615
client India, industry sources said, signalling that tough
Western sanctions which have slashed its exports in half
are driving Tehran to increasingly desperate measures to
keep oil flowing.
The US has yet to ease the pressure on Asian buyers to
continue reducing purchases from the Opec member, even
though Iran and world powers began two days of talks on
Thursday hoping to reach a “first step” towards ending the
decade-old standoff over Tehran’s disputed nuclear
programme.
The drop in exports is costing Iran billions of dollars in lost
revenue every month. Tehran is also unable to repatriate
most of the money earned from oil it does manage to sell,
as the sanctions have cut off bank transfer facilities,
crippling its economy by choking off its biggest revenue
stream.
Despite the near halt of petrodollar payments, Iran is
resorting to measures such as offering deep discounts on
oil and now free delivery to India, according to sources who
requested anonymity because of the sensitivity of the issue.
Iran’s remaining Indian clients — Mangalore Refinery and
Petrochemicals Ltd, Essar Oil and Indian Oil Corp — could
save freight of 70 cents to $1 a barrel on purchases from
Iran, said one of the sources.
Tehran is also offering Indian buyers a discount on price if
refiners raise purchases, the sources said.
“The more you buy, the more incentives you get. If a refiner
buys 30 million barrels of Iranian oil in a year then the
discount translates to 25 cents per barrel,” this source
added.
Iran already offers 90 days’ credit on crude sales to Indian
refiners while most other producers stick to 30 days’ credit.
While any discount would be attractive as India tries to curb
an oil import bill that was around $170 billion (Dh624
billion) in 2012/13, it likely would be wary of raising
imports just prior to a review of its waiver from US
sanctions.
India’s six-month exemption comes up for renewal in early
December, shortly after top US energy diplomat Carlos
Pascual’s current visit to New Delhi.
Sources have said the US is unlikely to allow Iran’s exports
to rise before a deal is struck with Tehran. Both sides
involved in the Geneva talks have said a breakthrough was
far from certain.
India so far looks well on track to meet US conditions to
renew its waiver. Daily imports from Iran slid 34 per cent in
June-September from the six months between December
2012 and May 2013, data from trade sources shows.
India is one of Iran’s few remaining clients along with other
Asian buyers China, Japan and South Korea.
In India, there is about $5.3 billion of Iranian oil money held
up by the sanctions. Of the total, about $1.8 billion is with
the oil companies who have bought crude from Iran and the
remainder is held with a bank, sources said.
In South Korea, total Iranian money stuck in bank accounts
is more than $5 billion, a source with direct knowledge of
the matter said.
In Japan, a similar amount of Iranian oil money has been
held up since the beginning of the year, according to
sources.
gulfnews.com/news/world/india/iran-offers-to-ship-crude-to-india-for-free-1.1252615
Therein lies the problem , Monsieur Bond . The petrodollar and monarchy is strong not so much for the sanctioned Tehran and both the Arabs and Persians continue to fight their proxy wars in Pakistan , taking the advantage of their " loyalists " here , of course . Why blame only one side ?
