India’s Nayara Energy has unveiled a plan for a major reduction in oil imports from Iran in the wake of returning US sanctions against the Islamic Republic.
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Reuters quoted unnamed officials as saying that Nayara Energy – previously known as Essar Oil – would slash its oil imports from Iran by almost a half.
"Nayara will be lifting about 40-50 percent less than the average volumes, limiting its intake of Iranian oil to about 3-4 million barrels in a month," Reuters quoted an official as saying.
Last month, US President Donald Trump said he would pull Washington out of a 2015 nuclear agreement with Iran. Trump also said he would launch mechanisms to re-impose what he described as the “highest level of sanctions” against Iran.
The sanctions would include a universal ban on Iran over buying or acquiring US dollars as well as restrictions over purchases of crude oil from the country and investing in its oil sector projects.
Nayara would join Reliance Industries – another Indian refiner – which announced last month it would halt oil imports from Iran from October-November.
Nayara's chief executive B. Anand said last week the refiner did not expect problems in finding alternative supplies in should it reduce Iranian orders, Reuters added further in its report. Anand said Nayara would leverage the supply and trading network of its major stakeholders, Rosneft and Swiss commodity trader Trafigura, to replace Iranian oil.
Iran's oil exports hit 2.7 million barrels per day (bpd) in May, the Oil Ministry's news agency SHANA reported earlier this month.
India, the world's third-biggest oil consumer and importer, imports about 4.5 million bpd, according to the data from shipping and industry sources, as reported by Reuters.