Delhi confirms planned cuts in Iranian crude imports

Indian state-controlled refiners led by MRPL and IOC will import less crude from Iran in the country's current financial year, oil minister Dharmendra Pradhan said, confirming earlier plans by the refiners to scale back purchases.

Pradhan appeared to link the reduction in crude purchases to moves by Iran to change its contract terms. Iran now offers a 60-day credit period for oil purchases, compared to 90 days earlier.

Iran previously provided flexible payment and credit terms to India because the country was one of the biggest buyers of Iranian crude, even when sanctions were in place against Tehran. But relations have deteriorated after Iran delayed awarding the Farzad-B gas area to a consortium led by India's state-controlled ONGC.

Pradhan did not give details of the cut in imports. But refinery officials said earlier this year they planned to cut term crude imports from Iran by up to 80,000 b/d. IOC, India's biggest refiner, and MRPL plan to cut their Iranian term purchases by about 20,000 b/d or 20pc in the 2017-18 fiscal year that started 1 April. The two companies will each buy around 80,000 b/d, down from just over 100,000 b/d under contract a year earlier.

State-controlled refiners BPCL and HPCL will cut their term Iranian purchases by 10,000 b/d, to around 30,000 b/d each from 40,000 b/d previously.

The planned cuts exclude spot purchases and imports by private-sector Indian firms Essar Oil and Reliance Industries (RIL). The companies took about 100,000 b/d each from Iran on a term basis before US-led sanctions curbed Tehran's exports. Essar maintained its purchases and imported 100,000 b/d last year, while RIL has started buying term Iranian crude again since the sanctions were lifted in January 2016.

Iran's crude deliveries to India fell to 340,000 b/d in May, down by around 40pc compared with the first quarter, as refiners scaled back purchases.