Asian crude oil buyers are Iran’s biggest cli¬ents but in 2013, they cut their purchases by 15 percent. China, India, Japan and South Korea to¬gether cut imports from Iran to an average of 935,862 barrels per day in 2013. That would mean an oil revenue loss of $46 billion for Tehran across the year, based on pre-sanction crude exports of about 2.2 million barrels per day.
Strict sanctions were placed on Iran in 2012 over its disputed nu¬clear program, causing its crude exports to slide to just over one million barrels per day and cost¬ing it billions of dollars per month in lost oil revenue. Despite the gradual easing of sanctions, the Asians are not expected to ramp up shipments quickly this year. Only China has made any move to increase its imports since the November 2013, with a state trad¬er trying to negotiate a new light crude contract for 2014.
Some market watchers say Iran’s oil exports picked up mod¬estly in January 2014, but available data has not shown any increase in shipments from Iran to Asian ports.
Iran’s biggest oil customer, Chi¬na, reduced imports by 2.2 per¬cent to 428,840 barrels per day in 2013, the thinnest cuts among the top four buyers. South Korea cut purchases by 14.3 percent last year to 134,008 barrels per day. Japan, the last of the four major Asian buyers to release data, reduced imports by 6.4 percent to 177,414 barrels per day, marking its low¬est daily crude imports from Iran since 1981.
The deepest reductions in Ira¬nian oil imports were made by India, which slashed the volume of crude it shipped in by 38 per¬cent to 195,600 barrels per day. In this fiscal year, 2014-2015 (April-March), India will lower its crude oil imports from Iran by 15% to 9 million-9.5 million mt from an estimated 11 million mt in fiscal 2013-2014.
R.K Singh, joint secretary for refineries at the Indian petro¬leum ministry said Essar Oil and Mangalore Refinery and Petro¬chemicals Limited; two of the largest importers of Iranian crude in India are expected to end the current fiscal year with imports of 4 million-4.5 million mt each, and Indian Oil Corp. will import around 1 million mt. This is down from 13.3 million mt in fiscal year 2012-2013.The cut is in line with the 15% annual reduction coun¬tries have to show to be eligible for US waivers from sanctions against Iran.
is the sanctions and the race show eligibility for US waivers. There are also concerns by Indian re¬finers over a clause in the insur¬ance policy that has put a ques¬tion mark over reinsurance cover for refineries processing Iranian crude.
In 2011, India was the fourth largest energy consumer in the world after the United States, China and Russia. India imports about 4 million barrels per day of oil or around 80 percent of what it uses.
Due to the sanctions on Iran, Indian refiners stepped up im¬ports mainly from Saudi Arabia, Venezuela and Iraq in the 2012 fiscal year to make up for lower shipments from Iran, with sup¬plies from the Middle East region constituting about 69 percent of overall imports compared with 64.5 percent in 2010/11.
Imports from the Middle East during the year rose 12.1 percent from a year ago while those from Latin America increased by 3.7 percent. However, the weightage of Latin American oil in India’s crude diet declined marginally in 2011/12 from a year ago.
Latin American countries such as Venezuela and African na¬tions such as Nigeria have been strengthening their position as important suppliers of crude oil to India. This, even as West Asia remains the major source of crude for Indian refiners. The increasing contribution of Venezuela and Ni¬geria notwithstanding, West Asia still accounted for the bulk (al¬most 65 per cent) of the crude oil sourced by India during the fiscal 2011. Saudi Arabia maintained its pole position and supplied around 27.4 mt in 2013.
According to BusinessDay Research and Intelligent Unit (BRIU) in the yet to be released Nigerian Oil and Gas Industry Report, India’s import of Nigeria crude oil is projected to grow by 26 percent to reach 116.8 million barrels in 2014.
The 2013 World Oil Outlook, a report released by the Organisa¬tion of the Petroleum Exporting Countries (OPEC), reveals that India’s demand for crude oil is to grow by 3 percent from 3.8 mil¬lion barrels per day in 2013 to 3.9 million barrels per day in 2014, with Nigeria accounting for 8.2 percent of India’s import in 2014,
The biggest change, therefore, this is equivalent to 0.32 mbpd or 116.8 million barrel for the year under review.
The Nigerian National Petro¬leum Corporation (NNPC) quar¬terly petroleum information also show that in the first three quar¬ters of 2013, India had the top spot of Nigeria crude oil export with importation of 73.12 million barrels, equivalent of 13 percent of Nigeria total export during the period.
There are no signs that India would wean itself from massive importation of crude oil in the coming years. Even with the pro¬jected growth of 26 percent in India’s import of Nigeria’s crude, there is room for more growth. With Nigeria’s crude export to US declining, Nigeria should take advantage of the dip in India’s im¬port of Iranian crude and ramp up more export to the energy hungry Asian country.
Source:- businessdayonline.com
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