India's crude oil imports from Iran down 28 % in FY'13

Indian refiners are increasingly reducing dependence on Iran crude oil supplies as insurers refuse to provide cover for oil imports from that country amidst Western sanctions.

Insurers are refusing to provide cover for India's crude imports from Iran because of the political risks and India's inability to deposit dollars or euros in foreign banks against crude imports from Iran.

India's crude imports from Iran is expected to fall to about 13 million tonnes for the current financial year ending 31 March against the 18.1 million tonnes imported last fiscal, official sources said.

During last fiscal itself (2011-12) Iran had been relegated to the third spot in India's oil imports at 18.1 million tonnes, against its imports of 32.5 million tonnes of crude from Saudi Arabia and import of 24.1 million tonnes crude from Iraq.

Iran, which was India's second-biggest supplier of crude oil after Saudi Arabia in 2010-11, slipped four places to become India's seventh-largest crude oil supplier this fiscal. Iran supplied 9.7 million tonnes during the April-December period of the current fiscal.

The 28-per cent fall in India's oil imports from Iran comes on the back of a general decline in Iran's crude oil exports, which plunged to its lowest since the Western sanctions came into effect in 2012.

Recently, Mangalore Refineries and Petrochemicals Ltd (MRPL) bought two cargoes of crude from Royal Dutch Shell despite an ongoing contract to buy around 5 million tonnes of crude annually from the Islamic Republic.

MRPL managing director PP Upadhya had, earlier, said in Mangalore that the company had to buy two high-sulphur oil cargoes from Shell as supplies from Iran did not materialise amidst global sanctions.

The West is putting the squeeze on Iran over its alleged nuclear weapons making programme by closing financial taps, hoping to force Tehran give up its nuclear programme.