Refiners in India plan further cuts to Iranian imports

Oil refinery officials in India are planning to further cut imports of Iranian oil, despite not being included in US sanctions.

Officials in Washington recently announced that it would not penalise countries that have cut purchases from Teheran, but oil industry executives in India plan to further reduce imports from the country anyway, with the decision largely supported by supply concerns being eased.

A recent threat of severe supply disruption has been eased in India, and the US decision helped Brent crude oil prices drop to $97.5 a barrel. Industry officials say that they will continue to look for alternative sources of oil, as pressure from the US to reduce the use of Iranian oil continues.

Several countries have been rewarded for cutting their imports of Iranian oil, with India, Malaysia, South Korea, South Africa, Sri Lanka and Taiwan all being exempted from sanctions. China, a large importer, has not been exempted.

A US government statement said: "Today's announcement underscores the success of our sanctions implementation. By reducing Iran's oil sales, we are sending a decisive message to Iran's leaders: Until they take concrete actions to satisfy the concerns of the international community, they will continue to face increasing isolation and pressure."

US secretary of state Hillary Clinton said that the exemption has been granted "for a potentially renewable period of 180 days". India has already managed to reduce imports of Iranian crude oil, although the oil ministry says it has not issued any directive to oil companies. The reduction is due to commercial decisions by refiners, officials said.

Recently released estimates from the International Energy Agency have revealed that Iran's oil exports have fallen by an estimated 40 per cent since the start of the year, chiefly down to Western sanctions.

"In months ahead, Iran may need to shut in production volumes if export markets remain similarly constrained and storage fills up," the IEA said in its monthly report.

Posted by Lauren Steadman