Page 5 - MEOG Week 06 2021

MEOG COMMENTARY MEOG

of the phase 14 refinery would come into opera- Given China’s history of working around
tion soon after March 20, with new trains inau- the sanctions to continue buying Iranian oil, it
gurated every quarter until the facility reaches would be unsurprising if sales had expanded,
full operational capacity by March 2022. while Bloomberg quoted a trader as saying that
Iranian flows had ticked upwards.
Oil exports Last week, the chairman of state-run Hindu-
While gas production has been on an upward stan Petroleum Corp. Ltd (HPCL) said Indian
trajectory throughout the past decade, feeding refiners would resume imports of Iranian oil if
increasing domestic demand, oil output has been the US eased sanctions against Tehran.
far more susceptible to political interference “Iranian crude had been in the [import] bas-
from abroad. ket of Indian refineries ... we will be happy to take
However, as MEOG have covered extensively that crude as and when the situation warrants
in recent months, Iranian oil production has and the crude is available,” MK Surana told a
increased following major efforts by local firms news conference.
to achieve the ambitious targets set when Tehran India was second only to China as an
anticipated swathes of foreign investment in its importer of Iranian crude prior to a tightening
hydrocarbon sectors in 2015-17. of US sanctions by the Trump administration in
With the end of the presidency of Donald mid-2019.
Trump in the US improving confidence about Surana reportedly added that Iran was previ-
Washington’s potential return to the negotiating ously offering favourable terms for payment and
table, Iranian oil exports have been rising. freight discounts among others, which made its
While the increases have been modest, with oil “preferential” compared to other grades.
Bloomberg quoting various industry sources as After stopping purchases from Iran, Indian
saying that the gains are around 30,000-50,000 refiners diversified their crude imports. “There
barrels per day (bpd), they represent greater are alternatives in the picture after that [intro-
confidence on behalf of buyers, though covert duction of sanctions]. Now US crude is coming
practices continue to be employed to maintain to India,” Surana added. India is the world’s third
a lack of clarity about sales. biggest oil importer and consumer.™

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