Indian refiners take advantage of Iranian price discounts
NEW DELHI (Reuters) -- Iran overtook political rival Saudi Arabia as India's top oil supplier in October, shipping data showed, just ahead of a producers' meeting this month to hammer out the details on output cuts aimed at reining in a global glut.
Iran used to be India's second-biggest oil supplier, a position it ceded to Iraq after tough Western sanctions over its nuclear development program limited Tehran's exports and access to finance.
But India's oil imports from Iran have shot up this year after those sanctions were lifted in January. In October they surged more than threefold compared with the same month last year, rising to 789,000 bpd, according to ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts.
Iran's surge to the No.1 spot is due partly to less available crude from Saudi Arabia, which has increased its capacity to refine oil instead of just exporting more crude.
"Saudi Arabia's refining capacity has increased over time so it is not in a position to increase its exports further, whereas Iran is better placed to raise its output and sales to India," said Ehsaan Ul Haq of U.K.-based consultancy KBC Energy.
RETURNING BUYERS
Indian refiners including Reliance Industries Ltd, operator of the world's biggest refinery complex at Jamnagar, that had stopped imports from Iran during the sanctions period have also returned as buyers of Iranian oil.
Iran produces almost 4 million bpd of oil and exports 2.4 million bpd. Tehran's exports dropped to 1 million bpd during sanctions, down from a peak of almost 3 million bpd in 2011, before tougher Western sanctions were implemented.
Gaining the top position as oil supplier to the world's third-biggest importer, even if only for one month, comes at a sensitive time.
Reporting by Nidhi Verma; Editing by Henning Gloystein and Tom Hogue
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