US sanctions aside, India imported a total of 3.46 million tonnes, or about 279,000 bpd barrels per day of oil from Iran in first three months of the fiscal year – with which, Iran replaced Saudi Arabia to become the second largest oil source for India, after Iraq.
Iran has regained its position as India’s second largest oil source after seven years, replacing Saudi Arabia – while Iraq remains India’s top oil supplier. The Oil Ministry of India stated that India imported a total of 3.46 million tonnes of oil from the period of April-June from Iran, which exceeded that imported from Saudi Arabia and became the second biggest oil source after Iraq. The private oil refiners on India, like Indian Oil Corp, Hindustan Petroleum, Bharat Petroleum etc. doubled up their imports from Iran due to their “almost free” shipping and an extended credit period on oil trading.
The rejuvenation of Iranian oil imports in India in the first three months of the fiscal year were also a result of the deepened bilateral ties between the two nations. However, considering confrontation from the United States and its strict sanctions for any nation that allies or trades with Iran; as well as the import waiver delays between India and Iran might reduce or end the oil trade. While there are possibilities of taping down the oil sources from Iran if the oil imports fails to get a waiver – but, finding a replacement for Iranian oil will not be a problem for India.
India already holds a diverse basket of oil suppliers and Iraq, Kuwait and Saudi Arabia can easily fill the gap. The high-tech Indian refineries also make India’s refining capability of 5 million tonnes of crude makes it extremely flexible to process oil from various sources. But, the real challenge is the ages old Delhi-Tehran relations of trade and finance and India’s hot-shot investment worth billions at the Chabahar port. Perhaps, the Iranian oil trade will find itself back to square one after a major surge.