India has turned to Saudi Arabia and Oman for its crude purchases after New Delhi cut its oil imports from Iran by 21.8 per cent as of the beginning of the year, reported local media.
According to two informed sources, India's Mangalore Refinery and Petrochemicals (MRPL) bought crude oil from the Abu Safah oilfield for the first time, as well as from Oman, to lessen its dependence on Iranian oil, reported Arab News.
Abu Safah is an offshore field of Arab medium crude that Bahrain shares with Saudi Arabia, while Saudi Aramco handles marketing through Ras Tanura.
Buyers are finding it increasingly difficult to purchase Iranian oil after the US imposed sanctions on the Kish Protection and Indemnity Club and the Bimeh Markazi-Central Insurance of Iran. The US says that Kish provides insurance for the National Iranian Tanker Co.
The European Union and US sanctions, aimed at forcing Iran to curb its disputed nuclear programme, have more than halved Iran's oil exports in 2012. India's MRPL purchased 500,000 barrels from the Abu Safah oil field, which will be shipped between April 1 and April 15. In addition, India's MRPL has bought another 650,000 barrels from Oman and that shipment will be delivered in the second half of April by the trading arm of Shell, added the report.
The sources further revealed that MRPL bought Abu Safah crude at a premium of around $1.60 over the price of Dubai crude, while it paid a premium of $1.80 for Omani crude.
MRPL operates a refinery in southern India with a capacity of 300,000 barrels per day (bpd). It has been the largest purchaser of Iranian crude.
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