European and Indian refiners are re-estimating their crude purchases to buy Iranian oil in 2021’s latter part. They are also anticipating the US sanction’s lift. Former President Donald Trump abandoned the 2015 Iran nuclear deal and reimposed sanctions on Tehran in 2018. US President Joe Biden and Iran are planning to recuperate the pact for Tehran. The main motive is to curb nuclear activities in exchange for lifting the sanctions.
Various Indian Refiners Committed to Purchase Iranian Oil
Several Indian refiners are committed to buying Iranian oil once the sanction is lifted. Until 2018, Turkey and Europe had consumed Iranian oil worth 5,00,000 BPD. China is Iran’s biggest client. India is Iran’s second-largest oil consumer. Henceforth, India was buying nearly 4,80,000 BPD in 2018’s beginning. Experts expect Iran to boost its exports to 1.5 million barrels per day. Most probably, it will happen in the year’s last quarter when the sanctions are lifted.
Which Refiners are in line to Buy the Iranian Oil?
Bharat Petroleum Corporation will buy Iranian oil once the sanctions are lifted. It plans to tap the spot market for 45 percent of its overall imports. Several other refiners are also in line to buy the crude oil. Hindustan Petroleum is another one in the queue. It said that it will buy Iranian oil as well if it is available at affordable prices. BPCL Kochi refinery will also purchase the Iranian crude oil if it is suitable.
Hindustan Petroleum will purchase Iranian oil as per techno-economic suitability. They will consider the situation once the sanctions are lifted. Mangalore Refinery and Petrochemical Ltd. will also cut spot purchases and buy Iranian oil. Other refiners such as Indian Oil Corp are also expecting to reduce spot purchases. They can easily process 14.6 million barrels of Iranian oil this year. Moreover, they are planning to buy 56 percent of their imports via term contracts this fiscal year.
OPEC Restricts Output During the Pandemic
Many Indian refiners have raised spot purchases’ share versus term contracts. The idea was to earn profit from cheaper barrels available in a surplus market. After the halt in Iranian oil, India expanded its imports and raised the US oil share. Iranian oil renewal will help India replace lower supplies from OPEC. OPEC stands for Organization of the Petroleum Exporting Companies. They have restricted output to support oil prices during the Coronavirus pandemic.