Despite US sanctions, India will buy oil from Iran in November

  • Despite US sanctions, India will buy oil from Iran in November

Despite US sanctions, India will buy oil from Iran in November

The United States plans to impose new sanctions targeting Iran's oil sector on November 4 to try to stop the country's involvement in conflicts in Syria and Iraq and bring Tehran to the negotiating table over its ballistic missile program.

In its World Economic Outlook released late on October 8, the International Monetary Fund said Iran's oil-driven economy is expected to shrink by 1.5 percent this year as a result of declining oil exports, with the drop in economic output accelerating to 3.6 percent in 2019. "We will be guided by our national interest", he said.

The U.S. oil drilling rig count fell for a third consecutive week, as rising costs and pipeline bottlenecks have hindered new drilling since June.

A vessel carrying 2 million barrels of Iranian oil was reported on Tuesday to have discharged the crude into a bonded storage tank at the port of Dalian in northeast China.

Later, talking to reporters, he said India has its own energy requirements which it has to fulfill.

That's down from at least 2.5 million bpd in April, before President Donald Trump in May withdrew the US from a 2015 nuclear deal with Iran and reimposed sanctions.

Iran accounts for 10% of India's crude oil imports, making it the second largest importer of Iranian oil behind China.

Iran says its oil flow to the market should not be hampered no matter what as Western oil news and information providers are steadily claiming declines in Iran's exports, putting them at about 1.7 million bpd ahead of the sanctions. "So let us see how it evolves".

Sources said Iran is open to accepting rupee payment for oil and may use the money to pay for equipment and food items it buys from India.

"What the Saudis had been supplying the market with, were not from Riyadh's spare capacity but from tapping its oil stocks", Zanganeh said, according to the website.

India has been curtailing oil imports from Iran since September.

Besides, New Delhi sought to get around the restrictions by supplying goods including wheat, soybean meal and consumer products to Iran in exchange for oil. The early October figures add to signs, however, that Iranian exports are falling more steeply than expected, stretching the ability of Saudi Arabia, non-OPEC Russia and other producers to fill the gap. Last applied from 2012 to 2015, the sanctions are in retaliation for Iran's supposed nuclear proliferation program.

Underlining the resilience of Iranian exports is the pledge by officials that the country will go full throttle in its production.

Besides blocking of banking channels from November, the absence of payment mechanism may pose a challenge to the transportation of the oil as Iranian crude is bought on a CIF basis and shipped on Iranian tankers.