NEW DELHI: Indian refiner Nayara Energy, one of the country’s biggest buyers of Iranian oil, began cutting imports this month after the US scrapped a nuclear deal with Tehran and said it would re-impose tough sanctions, three people familiar with knowledge of the matter said.
Previously named Essar Oil, Nayara was bought by Russian state oil-giant Rosneft and partners in a $12.9 billion deal last year. It typically buys around 5.5-6 million barrels a month from Iran, according to data made available to Reuters from industry and shipping sources.
The cuts by Nayara provide the latest indication that Asian buyers will cut orders from Iran after US President Donald Trump last month pulled out from the 2015 accord between Iran and world powers that lifted sanctions on Tehran in exchange for curbs to its nuclear program.
“Nayara will be lifting about 40-50 percent less than the average volumes, limiting its intake of Iranian oil to about 3-4 million barrels in a month,” said one of the people. All three sources declined to be identified as they were not authorized to talk to media.
Iran’s oil exports hit 2.7 million barrels per day (bpd) in May, the oil ministry’s news agency SHANA reported earlier this month.
India, the world’s third-biggest oil consumer and importer, imports about 4.5 million bpd, according to the data from shipping and industry sources.
Asked by Reuters whether Nayara plans to reduce monthly Iranian oil imports by 40-50 percent, the company said, “There are no specific cut-backs planned as of now,” adding “we are still seeking clarifications from all concerned.”
The US sanctions on Iran’s petroleum industry will take effect after a 180-day “wind-down period” ending on Nov. 4 but many European refiners, as well as buyers in Asia, are already winding down Iranian oil purchases.
The cuts by Nayara have kicked in before similar moves by Indian peers. Reliance Industries, owner of the world’s biggest single refining complex, plans to halt oil imports from Iran from October-November, sources said last month.
Nayara’s chief executive B. Anand said last week the refiner did not expect problems in finding alternative supplies in should it reduce Iranian orders. Anand said Nayara would leverage the supply and trading network of its major stakeholders, Rosneft and Swiss commodity trader Trafigura, to replace Iranian oil.
Officially, India’s oil minister Dharmendra Pradhan last week said the country has adopted a “wait and watch” policy pending clarity on the impact of US sanctions.
