NOVEMBER 3, 2018
Indian Prime Minister Narendra Modi. Photo: Ramesh Pathania/Mint
India and other major energy buyers will benefit from the petroleum minister Dharmendra Pradhan said on Saturday.
India is a major importer of Iranian oil — of the 220.4 million metric tonnes of crude imported by India in 2017-18, more than 9% was from Iran.
Pradhan credited the waiver to the efforts of Prime Minister Narendra Modi, Reuters reported. “In the current geopolitically challenging scenario, India has managed to convince international leaders.”
Given that the demand for petroleum products grew at a compound annual growth rate (CAGR) of 5.5% between 2013 and 2017, there were not many options available to India with terms as attractive as those offered by Iran. The Islamic Republic is a preferred supplier for India, making the country the second-largest purchaser of Iranian crude after China due to sweeteners such as 60-days credit, free insurance and shipping, among others.
US secretary of state Michael Pompeo on Friday said around eight countries would get temporary waiver from the US to buy Iranian oil after it reimposed sanctions on the Persian Gulf nation. He did not name the countries.
With buyers at the centre of oil majors’ future growth plans, India, which meets 83% of its crude oil requirement through imports, has been pushing for a change in the global energy architecture. It had proposed a consumers’ collective comprising major energy buyers—China, India, Japan and South Korea.
Any sanctions would have had a major impact on India, given it’s growing demand. According to the Organization of Petroleum Exporting Countries (OPEC), which accounts for around 40% of global production, global demand is expected to increase by 33%, or 91 million barrels oil equivalent per day (mboed), between 2015 and 2040. Of this, 24%, or 22 mboed increase, is expected from India.
Courtesy/Source: LiveMint / PTI
