Iran looks for new oil market as India turns to US

Business Materials 22 November 2017 15:21 (UTC +04:00)

Baku, Azerbaijan, Nov. 22

By Khalid Kazimov, Mehdi Sepahvand – Trend:

Iran is apparently looking for new oil markets in Europe after India, the world’s third largest energy-consuming economy, decided to cut oil imports in retaliation for Tehran's persistence to negotiate a better deal over a major offshore gas deposit in the Persian Gulf, Farzad B.

“The new strategies adopted by India and China have led the traditional suppliers of oil to modify their sells strategies,” an official with Iranian oil ministry told Trend.

Saying that under the new strategies India seeks to have a strong presence in the upstream sector of the supplier countries, he added that the volume of trade turnover has a key role in selecting the energy suppliers.

This has caused the suppliers to think of new plans to deal with the new strategies of the oil importers. For instance, Middle East oil giant Saudi Aramco has decided to invest in India’s oil sector.

Aramco earlier in October announced its expansion with the opening of its Asia India’s new office in New Delhi.

This is while the Islamic Republic has been planning to lure Indian investments into its upstream sector in order to protect its share from the Asian market.

Chabahar port and Farzad B gas field are among the main projects that could contribute to the total trade of Iran-India and eventually encourage Indians to continue oil purchase from Iran.

“I believe that India is somehow stepping up pressure on traditional suppliers like Iran in order to gain privileges from the Islamic Republic’s market such as Farzad B gas field. In the other words, Indians are trying to use the issue of imports as a tool to gain advantages in short-term,” said the official.

Iran and India have already held several rounds of talks over the long-awaited deal to develop the Farzad B field, but the two sides are at odds over the price of Iran's natural gas.

On the other hand, India is making efforts to expand its relations with the US in order to obtain unconventional technologies.

“However, this will not work in long-term in particular after balancing the oil market,” the official added.

In this situation, countries like Iran should make efforts to create new markets and that is why Tehran is now looking to find partners in the Europe. But there are some restrictions in the EU regarding fossil energies and that is why the major suppliers cannot consider the Europe as a lucrative market.

Iranian deputy oil minister, Marzieh Shahdaei, earlier said that the country is in talks with new customers in the EU, to export its crude.

“We are in talks with new customers for selling oil. We mostly tend to increase our exports of crude to European countries,” Marzieh Shahdaei said on Tuesday.

The drop in the volume of the purchase of Asian importers does not mean that Iran’s oil exports have weakened, she added.

India is among the major importers of Iran’s oil which has decreased its oil purchase after failing to secure the deal to develop Frazad B gas field. India has reportedly decided to replace Iran’s oil with the US oil.

Iran’s crude oil and condensate exports amounted for 2.6 million barrels per day (mbpd) in September 2017.

The country exported 2.25 mbpd of crude oil to Asian and European markets in the period. China and India were the main consumers of the Iranian oil with over 1 mbpd of purchase.