Indian refineries appear as overall winner of Iran-US nuclear row

Business Materials 23 April 2018 16:36 (UTC +04:00)

Baku, Azerbaijan, April 23

By Farhad Daneshvar – Trend:

Ahead of the May 12 deadline, on which US President Donald Trump must sign a presidential waiver on sanctions on the Islamic Republic, Tehran appears very likely to offer huge discounts to its oil customers.

Iran’s top oil official on Monday implicitly confirmed the rumors that the nation may allow India a discount to confront a possible decision by US President Donald Trump to leave the 2015 nuclear deal.

“We will take any required measure to confront Trump,” said Iranian Oil Minister Bijan Namdar Zanganeh responding to a question on the possibility of offering discounts to India to confront Trump.

“We have not offered a special discount to India so far. However, we may adopt some policies whenever required to keep a presence in the market,” ISNA news agency quoted Zanganeh as saying.

“We should wait and see Trump’s decision. The Islamic Republic of Iran will use its all capacities and experiences in order to prevent Trump from inflicting harm on Iran,” he added.

The minister further touched upon Iran’s recent deal with India on Farzad-B gas field and said India will deliver sour gas to Iran and the Islamic Republic will carry out swap operation itself.

Iran and India resolve oil row

Back on April 11, following several rounds of discussions, Zanganeh said that the disagreements between Iran and India over the development of the Farzad B gas field in the Persian Gulf were resolved.
The Indian government last year instructed state refiners to cut Iranian oil imports in a tit for tat reaction to Tehran’s decision on giving the development rights of Farzad B to other companies. As a result, Indian crude imports from the Islamic Republic dropped by 15.7 percent in the fiscal 2017/18.

According to Indian sources, in the fiscal year that ended in March, the world’s third largest oil importer received about 458,000 barrels per day (bpd) of oil from Iran, compared to about 543,500 bpd in the preceding year. India’s total oil imports in this period hit a record of 4.46 million bpd.

Now with the resumption of talks on Farzad B, the sides appear to be on the course of resolving the major gaps, as India has reportedly devised a plan to double Iranian oil imports in order to benefit from "freight discounts".

Zanganeh had earlier said that Indian refiners, state-owned and private, will buy about 500,000 bpd of Iranian oil in 2018/19.

Iran nuclear deal

European officials have already held several talks with Tehran, Moscow and Washington as part of a drive to salvage the nuclear deal with Iran that President Donald Trump is threatening to scuttle.

So far, Iran has adhered to the terms of the nuclear deal, as verified by International Atomic Energy Agency inspectors in previous reports since the pact was implemented in January 2016.

But the economic benefits Iran is receiving in return have fallen short of expectations, even after energy and financial sanctions were lifted. Major banks and companies have avoided engaging with Iran from fear of running afoul of remaining US restrictions or seeing a “snapback” of sanctions given Trump’s threats.

Trump has told the Europeans that they must agree to “fix the terrible flaws of the Iran nuclear deal” or he would re-impose the sanctions that Washington lifted as part of the pact.

Iranian top officials have said that the country has drawn up its own options to deal with Trump’s possible decision on walking away from the 2015 nuclear deal and the US will regret if its president decides to tick the nuclear deal off.