India's top refiner says will buy Iranian oil if sanctions lifted

NEW DELHI: Indian Oil Corp, the country's top refiner, said on Thursday it would resume purchases of Iranian oil if Washington lifts sanctions against Tehran over its disputed nuclear programme.

The European Union official leading talks to revive Iran's nuclear deal said on Wednesday he was confident an agreement would be reached as the negotiations adjourned, although European diplomats said success was not guaranteed with very difficult issues remaining.[

"We were buying Iran crude earlier before sanctions, and I don't have any doubt why we will not buy Iran crude because that favours the Indian refining system if the sanctions are lifted," S. K. Gupta, head of finance at IOC, told an analyst call.

"So, we will definitely buy it."

India, the world's third largest oil consumer and importer, halted oil imports from Tehran in 2019 as a temporary waiver granted to some countries expired. Former US President Donald Trump abandoned the 2015 Iran nuclear deal in 2018 and reimposed sanctions.

US President Joe Biden's administration and Iran have engaged in indirect talks to revive the pact for Tehran to curb its nuclear activities in exchange for a lifting of sanctions.

Indian refiners are planning to replace some of their spot purchases with Iranian oil in second half of this year as the US and Iran inch closer to a deal.

"Supplies from Iran will brings additional balance to the market which helps consuming countries," said M.K. Surana, Chairman of state-run Hindustan Petroleum Corp.

He said HPCL will also consider buying Iranian oil if sanctions are lifted and hoped that Iran will continue to offer discounts on crude and shipping.

"It is always on the basis of mutual negotiation between the parties concerned. In the past Iranian suppliers have given us better payment terms, freight terms and it is expected that the same will definitely be available," he told a press confernce.

Gupta also said IOC might continue with a cut in refinery crude runs till the end of this month.

The refiner, which was operating its plants at 96% capacity in April, has reduced throughput to an average 84% as lockdowns to curb COVID-19 cases hit industrial activities and fuel consumption.

He said refining margins and fuel demand are expected to recover due to vaccination drive undertaken across the world to rein in the spread of coronavirus infections.