India Largest Importer of Iran Oil for a Month

India became the world’s largest importer of Iranian crude oil in January this year. Iran praised this and the West denounced it, but Indian officials say both are making a mountain out of a petrol pump. The January spike is a statistical anomaly caused by the sudden arrival of a bunch of shipments Iran had not sent in October-September last year.

India imported an estimated 2.2 million metric tonnes in January, a jump from the roughly 1.4 metric tonnes it imported on average per month last year.

However, the figure is expected to fall back to 1.4 million tonnes in February.

India’s jump to the top of Iran’s customer list was played up by the Wall Street Journal and the Iranian media. The Western media said it was evidence that India, despite opposing Iran’s nuclear programme, had decided to play a more mercenary role. The Iranian press cited it as evidence sanctions were failing.

The truth is India’s imports from Iran are decided not by New Delhi but by the commercial calculations of four oil refineries. “We cannot dictate to the refineries what they should do,” said a senior Indian official last week.

The refineries, because of difficulties in paying Iran following Western sanctions, have been switching to other exporters like Saudi Arabia. For example, Hindustan Petroleum Corporation Limited’s daily refining intake of Iranian crude has dropped from 15,000 metric tonnes in September last year to about 2,800 metric tonnes today — an experience felt across the board by all refineries.

The broad trend is a slow but steady decline in Indian imports of Iranian crude as refineries move to safer alternatives. India imported 21.8 million metric tonnes in 2008-09, about 18.5 million tonnes last year and will see the figure drop to 17.5 million tonnes in the coming months.

India’s imports shrank in September-October last year as the two countries struggled to find a payment mechanism that could avoid sanctions — the Indian Oil Corporation refinery took in almost no Iranian crude in October. This was only partially resolved last month when Iran agreed to accept rupees for partial payment.

But the agreement has meant a sudden, temporary surge in imports in January that, in the present charged environment regarding Iran inspired a lot of sound and fury over nothing. “Monthly import figures are meaningless,” said an Indian official.



Copyright © 2012 Hindustan Times.

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