Iran retaliates to Indian oil cut plans

[Arsalan mehmud]

Iran, India's third biggest oil supplier, used to give a 90-day credit period to refiners like Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL) to pay for the oil they would buy from it.

Iran has cut by one-third the time it gives to Indian refiners to pay for oil they buy from it and has also raised ship freight rates as a retaliatory measure to New Delhi's decision to reduce Iranian oil imports.

Iran, India's third biggest oil supplier, used to give a 90-day credit period to refiners like Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL) to pay for the oil they would buy from it.

Now, Tehran has reduced this to 60 days, essentially means that IOC and MRPL would have to pay for the oil they buy from Iran in 60 days instead of previous liberal term of 90 days, sources privy to the development said.

Iran oil sale terms were the most attractive for Indian refiners. Besides a liberal credit period, it also shipped the oil to India for a nominal 20 per cent of normal ocean freight.

Other Middle-East sellers offer not more than 15-day credit period.

Sources said National Iranian Oil Co (NIOC) has also decided to cut the discount it offers to Indian buyers on freight from 80 percent to about 60 per cent.

IOC and MRPL -- largest state buyers of Iranian crude -- will cut imports from Tehran to 4 million tonnes in 2017-18 from 5 million tonnes in the previous year.

Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) will cut oil imports from Iran by 0.5 million tonnes each to 1.5 million tonnes as New Delhi built pressure on Tehran to award the Farzad-B field to its discoverer, ONGC Videsh Ltd.

Iran has deterred in awarding rights to develop the 12.5 trillion cubic feet discovery OVL had made 10 years back and now New Delhi is using its oil imports as a bargaining tool to get Tehran to agree.

Earlier this week, Iranian Oil Minister Bijan Zangeneh had dismissed the threat of cutting imports, saying, "We cannot enter deals under threats."

"Using language of threats is not appropriate," Zangeneh was quoted as saying by Iranian news agency Irna. "There are a lot of customers for Iranian oil and their demand surpasses our export capacity."

India is Iran's second biggest oil buyer after China and was among a few which had continued to import crude despite Western sanctions against Tehran.

Since lifting of the sanctions last year, Iran is playing hardballs over award of rights to develop Farzad-B gas field in the Persian Gulf to OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC).

OVL has submitted a revised master development plan of over USD 5 billion for developing the field.

The new plan, filed with Iranian Offshore Oil Company (IOOC), excludes liquefaction facilities to turn the gas into LNG for ease of shipping to nations like India, sources said.

The two nations were initially targeting concluding a deal on Farzad-B field development by November 2016 but later mutually agreed to push the timeline to February 2017.

Now, the deal is being targeted to be wrapped up by September after the two sides agree on a price and a rate of return for OVL's investments.

Farzad-B was discovered by OVL in the Farsi block about 10 years ago. The project has so far cost the OVL-led consortium, which also includes Oil India and IOC, over USD 80 million.

Iran was initially unhappy with the USD 10 billion plan submitted by OVL for development of the 12.5 trillion cubic feet (tcf) reserves in Farzad-B field and an accompanying plant to liquefy the gas for transportation in ships.

It felt the USD 5 billion cost OVL and its partners have put for developing the field was on the higher side and wanted it to be reduced. OVL will earn a fixed rate of return and get to recover all the investment it has made in the field development.

The field in the Farsi block was discovered by the OVL- led consortium in 2008. It has an in-place gas reserve of 21.7 tcf, of which 12.5 tcf is recoverable.

http://www.moneycontrol.com/news/bu...taliates-to-indian-oil-cut-plans-2254605.html

Thats good steps.. tit for tat.. India understand only that language..

 

[Śakra]

What do you think i wrote?

I thought you meant it sarcastically.

 

[deckingraj]

The invitation was not completely serious, but its clear the establishment were floating the idea out there to see if India would pick up on it, If India did agree to join then I dont see why Pak government would oppose that. Even the Chinese foreign minister commented on it, recommending India join the project.

Look when easy pickings are out there and not worked upon who on his sane mind will even think about joining CPEC...You guys have backed rather unceremoniously from MFN status during Zardari era..so can't blame us... CPEC route via P-O-K is another thorn...so needless to say it is a non-starter(atleast in near future)..

Obviously

Consensus then...good...

true, there are limits with what you could do with Iran, but why would India care? In addition to Chabhar, you were buying Iranian oil and Gas in large quantities, in fact Iran had become India's second largest oil supplier during the height of sanctions. Only under pressure from Americans did that number (allegedly) decrease in 2012. The Iranian deal lifted the sanctions on Iranian oil, and allowed Iran to trade with the rest of the world, but like I said India was already doing those things anyway and was trading with Iran via the ACU

ummm but it was you who said that we jumped on Chabahar only after CPEC and that too for isolating Pakistan...I am just arguing against that...and no after lifting of sanctions engagement has gained lot of speed and ambit has increased as well...and not limited to Chabahar...

The idea of a China-Pakistan corridor and port has been floating around since the creation of Pakistan, but only really pushed for officially by the Musharraf and Zardari governments. In 2013 agreements were signed, and Chinese officials announced the funding in 2014.

Now, Chabahar by that point was already operational, but Indian projects had been going at a slow pace, suddenly in mid-2016 when Gwadar Port was about to become operational Modi went to Iran and tried to revive the project.

Is it really that far-fetched to think that in the year and a half since the Chinese announcement that India suddenly thought that they need to get Iran on their side? What else explained the sudden spike in awareness, and attempt to revive Iran ties?

Pitty ...that even after giving you timelines you are still asking me this...Modi came in 2014...so he really needed to wait for 2 years and Chinese announcements to realize what you are trying to say?? Do you honestly think we are this incompetent?? It was logical for us to wait for sanctions to be lifted...that process started only in June 2015...I even asked you to check your progress on Iran Pakistan pipeline..Last i checked you are still an energy starved nation and this project was halted...so why singling out India here??

If its really about trying to trade with Central Asia, you realise thats impossible that is without indirectly supporting the Taliban? They control a significant amount of Afghanistan and are holding the highways connecting Iran to Afghanistan. Any kind of risk assessment would have immediately thrown this project out since logically it goes against interests to fund the Taliban, but instead India decides to announce it again in 2016 with the Afghan government on the brink of defeat? Clearly there are bigger intentions behind it.

Sorry but that's a wrong way of looking at it...If what you are saying is true then it is even more stupid to announce anything in 2016 irrespective of intentions...So what a port is going to do if we can't even trade via it?? ..Do you believe Iran will allow IN to station there permanently.....so what are we going to achieve investing in a port that will not give us any additional base and nor viable for trade?? Clearly our establishment have different risk assessment than what you are projecting...There is no military objective when it comes to Chabahar...but would love to read your take on it... please help how you think we will isolate you via Chabahar...

Its what your own people are saying. Every single time Indian media talks about Chahabar they also bring up CPEC, all your political analysts call it a 'counter' to Gwadar port, even your politicians are demanding that funding be expedited because Gwadar was already functional.

Yes...and its rational...no?? however it is purely from economic perspective...It is you who is claiming that we have larger intentions like Pakistan isolation...Think about it...why do we even need a port for access to central Asia...our best route is via Pak-AF corridor...no?? Since that is not gonna happen we need a port...and if we need a port it is logical for it to be functional sooner than later...

Why continuously bring up Gwadar and CPEC whenever Chahabar is mentioned if that ridiculous 'isolation policy' is not the purpose?

because those ports are going to compete in near future...I am sorry i am still not getting how will this isolate Pakistan...can u please throw some more light on that angle...

 

[Flash_Ninja]

ummm but it was you who said that we jumped on Chabahar only after CPEC and that too for isolating Pakistan...I am just arguing against that...and no after lifting of sanctions engagement has gained lot of speed and ambit has increased as well...and not limited to Chabahar...

Yeah im saying that if India still had the same intentions from 2003 then the project would have been expedited and completed much quicker, however the project instead stagnated and only re-surged after Modi went to Iran and signed the agreements to invest in the port. A date with too many coincidences to just solely be for trading purposes.

Pitty ...that even after giving you timelines you are still asking me this...Modi came in 2014...so he really needed to wait for 2 years and Chinese announcements to realize what you are trying to say?? Do you honestly think we are this incompetent?? It was logical for us to wait for sanctions to be lifted...that process started only in June 2015

Well first he probably had to look at the options, India already had its foot in the door with Chahabar so probably went with that, then they had to make sure there was enough in the coffers, then setting up the meetings, etc.

Those things take a lot of time to set up anyway, and giving the slowness of Indian bureaucracy its not hard to imagine a project of that scale would take that long to materialise.

I even asked you to check your progress on Iran Pakistan pipeline..Last i checked you are still an energy starved nation and this project was halted...so why singling out India here??

Because the threads about Iran-India??

Sorry but that's a wrong way of looking at it...If what you are saying is true then it is even more stupid to announce anything in 2016 irrespective of intentions...So what a port is going to do if we can't even trade via it??

Iranian oil and gas, not to mention getting all those Indian companies right next to the border. If you actually plan to use the port to trade with C.Asia, do you also plan to fund the Taliban? By running a route through Afghanistan you also have an unstable trade route and theres no guarantee that the goods will reach their destination, these things get picked up early on in the risk assessment; and the fact that in 2016 when the Taliban hold so much territory this project is announced is either really dumb, or is for other purposes.

My theory is that they are trying to encircle Pakistan in Iran and Afghanistan, provide a route bypassing Pakistan to the Afghans, bringing Indian "businessmen" in the border areas, and have the ability to export more Iranian oil and gas. Just saying that they are just trying to have more trade with Central Asia is wrong.

There is no military objective when it comes to Chabahar...but would love to read your take on it... please help how you think we will isolate you via Chabahar...

because those ports are going to compete in near future...I am sorry i am still not getting how will this isolate Pakistan...can u please throw some more light on that angle...

You tell me, theres a reason i put it in quotation marks because its what your people and media claim. Perhaps by bypassing Pakistan you hope to 'deprive' us of trade, a form of isolation.

 

[my2cents]

The 1979 Revolution was probably the worst fvck up that we could ever come up with in our history. Thanks to Akhond's foreign policy we fvcked our relationship with the west and turned them into our enemies. Now we got stuck with counties like Russia, China and India and they are exploiting our situation cause we don't have any alternative.

You feel that you got exploited but it was not our doing. You got into mess with the west and you were barred to trade with rest of the world. We did our best to pay you in dollars but west got a wind of it and closed all the loop holes. We ended up doing barter and rupee transactions during sanction. Either that or you would end up hurting your economy.

 

[925boy]

60 days credit is still a very generous payment term.

Yes, Measured Iranian warning to India to stop playing games and behaving as if they are not benefiting.

Lol...ungrateful Iranians!! We stood against American sanctions to buy oil from you!!
We'll see who will buy your oil when next round of sanctions come up!!

wtf r u talking about? u bought Iranian oil and 1) told Iran they can collect payment in rupees and 2) Didnt allow the money out of India until after sanctions.
Am sorry but actions speaks louder than words and when i look at India's behaviour towards Iran during sanctions, India has helped Iran MODESTLY at best. India, like many other countries manipulated these situations for her benefit, but its fine, but dont come and pretend like India was a "friend".

 

[Mugwop]

Lol why should we be thankful...we can buy oil from anywhere we want...Saudi is begging us to buy oil from them...we bought oil from Iran just as a friendly gesture...!
Taking advantage?! Then why didn't any other country apart from us buy oil from Iran!! Did they do favor to Iran by cutting their oil imports? Including china!!


If we didn't buy oil from them...they would've had to drink their own oil since no one is buying them...including your country!


Question is.... why no other country availed the cheap bumper offer??

But since you are buying oil from them,Both countries are benefiting. It's a business relationship and doesn't have much to do with friendship.

 

[AZADPAKISTAN2009]

How to Deal with Banya 101 Lesson:

STEP1 : Call and Tell Banya you won't get Free Oil
STEP2 : Hang up the phone call on Banya first (Very important you have to hang up phone first)
STEP3 : Patiently wait 3-4 Weeks as the oil supplies run out in India and riots start
STEP4 : Call back and tell Banya , oil prices are going up you might consider a deal if India pays in next 4 hours
STEP5: Hang up the phone again
STEP6: Call back 10 minutes later and offer the oil final time

Result: Banya will wire you cash in Dollar in 4 hours !!!

If you will let banya climb on your head he will pee on your head

 

[ashok321]

Why Iran is willing to upset India, it's 2nd biggest oil customer

 

[deckingraj]

Yeah im saying that if India still had the same intentions from 2003 then the project would have been expedited and completed much quicker, however the project instead stagnated and only re-surged after Modi went to Iran and signed the agreements to invest in the port. A date with too many coincidences to just solely be for trading purposes.

Fair enough...however to me it is logical that sanctions were lifted in 2015 and projects were pushed in 2016...i have not got any satisfactory reply from you, so far on why this coincidence can't be possible...

Well first he probably had to look at the options, India already had its foot in the door with Chahabar so probably went with that, then they had to make sure there was enough in the coffers, then setting up the meetings, etc.

Those things take a lot of time to set up anyway, and giving the slowness of Indian bureaucracy its not hard to imagine a project of that scale would take that long to materialise.

Aren't you making a very obvious mistake here? Project started in 2003...and not in 2015....In 2015 it got the green light from Uncle Sam(in terms of sanctions)...thereafter it still took an year to get into a contract explains a lot about our bureaucracy....however please keep in mind that govt. is very different this time...by 2018 every single village in India will have electricity...and the pace at which we are going ..most likely that will happen...!!

Because the threads about Iran-India??

Yes..however two different reasons for the same action is what i am pointing out here...Pakistan is energy starved and pipeline from Iran will boost her efforts in overcoming those problems...and yet it was stalled...same is true for India...we want that route and sanctions played spoil-sport...

Iranian oil and gas, not to mention getting all those Indian companies right next to the border. If you actually plan to use the port to trade with C.Asia, do you also plan to fund the Taliban? By running a route through Afghanistan you also have an unstable trade route and theres no guarantee that the goods will reach their destination, these things get picked up early on in the risk assessment; and the fact that in 2016 when the Taliban hold so much territory this project is announced is either really dumb, or is for other purposes.

I have already explained that part...Your reading about Taliban control is different from our planners...simple!!

My theory is that they are trying to encircle Pakistan in Iran and Afghanistan, provide a route bypassing Pakistan to the Afghans, bringing Indian "businessmen" in the border areas, and have the ability to export more Iranian oil and gas. Just saying that they are just trying to have more trade with Central Asia is wrong.

I hope you can see contradiction in your own post...On side you claim that Taliban control this route, means, the route is not viable....on other side you say the idea is to bring in "businessmen" to export more Iranian oil...whereas in reality we are reducing that amount.....so we are investing billions of $$ on a non viable route, just to boost export of oil(where we are doing exactly opposite)?? If by quoting businessmen you mean Indian spy's then I am sorry but one has to be nuts to develop a port just so that one can get an alibi to ship some spies...and that too when the country involved is next door neighbour.....

You tell me, theres a reason i put it in quotation marks because its what your people and media claim. Perhaps by bypassing Pakistan you hope to 'deprive' us of trade, a form of isolation.

I have already told you what i think about it...it is you who is saying motives are sinister...so quiet logical for you to do the explanation here...no??

 

[Flash_Ninja]

Fair enough...however to me it is logical that sanctions were lifted in 2015 and projects were pushed in 2016...i have not got any satisfactory reply from you, so far on why this coincidence can't be possible...

Like I already said, India was ignoring sanctions anyway and trading with Iran via ACU. Pre-Sanctions, Iran was in fact Indias largest oil import, so this notion of 'waiting for sanctions to be lifted' is ridiculous. Even when Chahabar was started in 2003, Iran was already under sanctions by the US, so why did India create that project in the first place?

Aren't you making a very obvious mistake here? Project started in 2003...and not in 2015....In 2015 it got the green light from Uncle Sam(in terms of sanctions).

I was saying it was brought up again becasue of Gwadar, the fact that the project started in 2003 and made little progress up to that point just proves it.

I have already explained that part...Your reading about Taliban control is different from our planners...simple!!

So Indian planners don't acknowledge the existence of Taliban? Because the central Asia trade route is not going to work until you realise that you're going to be paying heavy tolls to move goods through Taliban held territory, I imagine if ISIS starts to gain even more ground then the route will just be shut down all together.

I hope you can see contradiction in your own post...On side you claim that Taliban control this route, means, the route is not viable....on other side you say the idea is to bring in "businessmen" to export more Iranian oil...whereas in reality we are reducing that amount.....so we are investing billions of $$ on a non viable route, just to boost export of oil(where we are doing exactly opposite)?? If by quoting businessmen you mean Indian spy's then I am sorry but one has to be nuts to develop a port just so that one can get an alibi to ship some spies...and that too when the country involved is next door neighbour.....

Read my post again, i think you misunderstand