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India to cut Iranian oil purchases in row over gas field

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New Delhi:  Indian state refiners will cut oil imports from Iran in 2017-18 by a fifth, as New Delhi takes a more assertive stance over an impasse on a giant gas field that it wants awarded to an Indian consortium, sources said.

After China,India Iran’s biggest oil buyer was among a handful of countries that continued to deal with the Persian Gulf nation despite Western sanctions over Tehran’s nuclear programme.

As per sources, Unhappy with Tehran, India’s oil ministry has asked state refiners to cut imports of Iranian oil. Indian refiners told a National Iranian Oil Company (NIOC) representative about their plans to cut oil imports by a fifth to 190,000 Barrels Per Day (bpd) from 240,000 bpd.

“We are cutting gradually, and we will cut more if there is no progress in the matter of the award of Farzad B gas field to our company,” sources said.

Indian Oil Corporation and Mangalore Refinery and Petrochemicals Corporation will reduce imports by 20,000 bpd each to about 80,000 bpd. Bharat Petroleum Corporation and Hindustan Petroleum Corporation will together cut imports by about 10,000 bpd to roughly 30,000 bpd, as per sources.

On the other hand, NIOC threatened to cut the discount it offers to Indian buyers on freight from 80 percent to about 60 percent.

Notably, From April last year to February 2017, India imported 5,42,400 bpd from Iran, compared to 2,25,522 bpd a year earlier. Average oil volumes supplied by Iran over this period were the highest on record.

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