Iraq replaces Saudi as top oil supplier to India in August

Iraq replaced Saudi Arabia in August as the top oil supplier to India, data from industry and shipping sources showed, as refiners turned to Iraqi barrels to compensate for a lower intake of Iranian oil ahead of US sanctions in November.

The United States is reimposing sanctions on Iran following Washington’s decision in May to withdraw from a 2015 international deal aimed at curbing Tehran’s nuclear programme. While some sanctions were implemented from August 6, those affecting Iran’s petroleum sector take effect only from November 4.

Imports of Iranian oil by India, Tehran’s top oil client after China, fell by about a third to about 523,000 bpd in August from July as state-refiners slowed purchases due to a delay in securing government approval to use Iranian ships.

Despite the lower purchases, Iran remained the third biggest oil supplier to India in August, the data showed.

Washington will consider waivers for Iranian oil buyers such as India but they must eventually halt imports as sanctions are imposed on Tehran, US Secretary of State Mike Pompeo said last Thursday.

Iraq and Saudi Arabia continued to be the two biggest oil suppliers to India last month, the tanker arrival data obtained from sources showed. The sources declined to be identified.

Indian refiners shipped in 1.02 million barrels per day (bpd) of Iraqi Basra oil in August, an increase of about 46 per cent from the previous month, while imports from Saudi Arabia declined 5 per cent to about 747,000 bpd during the period, the data showed.

India imported less Nigerian oil in August as the west African nation’s output was hit by outages in a couple of major streams such as Bonny Light and Tornados. Also, Asian buyers opted to take light sweet US oil rather than Nigerian.

India’s imports of US oil in August rose to a record 275,000 bpd, accounting for about 6 per cent of its overall purchases, the data showed.

India refiners had booked US oil cargoes in June when discounts between US crude future and Brent was wide enough to make arbitrage economics feasible for India.

India’s monthly oil imports from Nigeria declined by about 34 per cent to about 279,000 bpd, the data showed.

Overall India’s monthly oil imports in August rose 3.1 per cent to about 4.7 million barrels, while they were up 15.8 per cent from a year earlier, the data showed.