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India's crude Oil imports from Iran tank by 40 Percent despite thawing US sanctions

Although India became world’s third largest crude oil importer in 2013, import of Iranian oil slumped by nearly 40 Percent. Despite landmark thaw in tensions between Tehran and six global powers on 24 November compared to pre-2012 imports. December figures do not shown considerable increase in Persian oil purchases by Indian refiners.Iranian crude import for 2013 averaged about 1 million barrels per day (bpd). India imported 120,000–130,000 bpd crude oil from Iran.

Indian oil refiners had slashed oil imports from Iran over re-insurance concerns. Indian insurance companies depend largely on the western reinsurances owing to high risk involved in crude import. The sanctions discouraged global reinsurers from backing up Indian insurers, thus reducing New Delhi’s oil imports from Tehran.

Ministry of Oil and Petroleum plans to import on an average 220,000 bpd of Iranian oil during financial year 2013–14 (FY’14). However, New Delhi could cut imports to 180,000–190,000 bpd if sanctions do not ease off quickly. It is important for India to import more of Persian crude oil as Iran to curb US Dollar (USD) outflow as Iran trades in Euro, Indian National Rupee (INR) or even gold. India hopes growing import of Iranian oil to narrow down twin deficits.

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