Insurance companies not covering storage of Iranian oil, says Indian Oil official

Lloyd Doyle
October 17, 2018

The Trump administration is actively considering waivers on sanctions for countries that are reducing their imports of Iranian oil, a USA government official said earlier this month. "For the global economy, the shock increase in oil prices will certainly lead to disastrous consequences, especially in net importers, where gasoline prices in the domestic market are not regulated", he said.

"While some countries have stopped buying oil from Iran, we have found new partners", he was quoted as saying by Iran's IRIB broadcaster on October 15.

With the world's only sizable spare oil output capacity, Saudi Arabia is expected to export more to offset the loss of Iranian oil supply from the sanctions.

A day after Saudi Arabia said it would retaliate to any possible US sanctions over the disappearance of a journalist, which led to a spurt in Brent crude prices, the world's largest oil exporter struck a conciliatory tone in India.

According to Refinitiv Eikon data, Iranian exports of crude oil have declined to 1.33 million bpd, a sharp contrast to April's 2.5 million bpd, before the United States withdrew from the Iranian accord amidst harsh criticism, and USA pressure on allies to cease purchases of Iranian-sourced crude appear to be working, dragging oil prices steadily higher on the higher timeframes.

"It is important for India to get some barrels of crude from Iran otherwise if Saudi and major producers are not able to jack up their production, it will impact prices", he said.

Brent crude prices were trading 80 cents a barrels higher at $81.23 by 11.57 GMT.

"Aramco wants to invest in consumer-facing businesses such as retail, petrochemicals, and expects robust downstream presence", added Al-Falih.

Jahangiri said some countries that have stopped importing oil from Iran are looking for workarounds that would allow them to continue to import energy from Iran indirectly.

India plans to build two strategic storage facilities to hold 6.5 million tonnes of oil costing around 110 billion Rupees ($1.6 billion) through a joint partnership between an Indian state firm and private company.

Falih also said Saudi Basic Industries Corp (SABIC) is keen to invest in India's chemicals sector.

Other reports by Iphone Fresh

Discuss This Article