US ending Iran oil waivers: India to get extra oil from major producers, Japan expects little impact

The United States has demanded that buyers of Iranian oil stop purchases by May 1, 2019, or face sanctions.
The United States has demanded that buyers of Iranian oil stop purchases by May 1, 2019, or face sanctions.PHOTO: AFP

NEW DELHI (REUTERS) - India will get additional supplies from other major oil producing countries to compensate for loss of Iranian oil, India's Petroleum and Natural Gas Minister Dharmendra Pradhan tweeted on Tuesday (April 23).

The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which had allowed Iran's eight biggest buyers, most of them in Asia, to continue to import limited volumes.

Pradhan said India has put in place a robust plan for adequate supply of crude oil to refineries.

"Indian refineries are fully prepared to meet the national demand for petrol, diesel and other petroleum products," he said.

Reuters last week reported that Indian refiners are increasing their planned purchases from the nations of the Organization of the Petroleum Exporting Countries (OPEC), Mexico and the United States to hedge against loss of Iranian oil.  

Refiners in India, the world’s third-biggest oil importer and Iran’s top oil client after China, had almost halved their Iranian oil purchases since November when petroleum sanctions went into effect. At the time, the United States granted waivers from sanctions, known as significant reduction exceptions (SRE), for six months to countries that purchased some amounts of Iranian crude, including India.

Meanwhile, Japan said it expects a limited impact from the US decision not to renew waivers previously granted on Iran oil import sanctions, the country's trade and industry minister said on Tuesday.

Japan and India are among a group of countries that were previously granted sanctions waivers.

Speaking at a regular press conference, Japan's Minister of Economy, Trade and Industry (METI) Hiroshige Seko told reporters the government did not see any need to tap national oil reserves following the US decision.

 
 
 

Japan, the world's fourth-biggest oil consumer, has been reducing its reliance on Iranian crude supplies. Iran now accounts for about 3 percent of purchases, Seko said.

"We will closely watch international oil markets and exchange views with Japanese companies involved in crude imports and may consider taking necessary measures," he said, declining to give details.

The United States reimposed sanctions on exports of Iranian oil last November following US President Donald Trump's move to unilaterally pull out of a 2015 accord between Iran and six world powers to curb Teheran's nuclear programme.

Eight economies, including China and India as well as Japan, were granted waivers for six months, and several had expected those exemptions to be renewed.

Japanese refineries earlier put a halt on imports of Iranian oil after buying 15.3 million barrels between January and March ahead of the expiry of their sanctions waiver, according to industry sources and data on Refinitiv Eikon.

The White House said it was working with top oil exporters Saudi Arabia and the United Arab Emirates (UAE) to ensure the market was "adequately supplied".

Sultan Ahmed al-Jaber, the CEO of the Abu Dhabi National Oil Co (ADNOC) of the UAE is in Tokyo for talks with Seko, METI said. The visit was planned before the U.S. announcement, an official in the Japanese ministry said.

Khaled al-Fadhel, the Kuwaiti oil minister, is also in Tokyo, the METI official said.

Al-Jaber and al-Fadhel will hold talks with Seko separately later on Tuesday but there are no plans to discuss alternative supplies to Iranian crude at the meetings, the official said.