Reliance Industries has purchased 5 million barrels of Iranian crude just after the United States (US) President Donald Trump temporarily removed sanctions
on the oil, as per the reports. On Friday, the US government issued a 30-day sanctions waiver for the purchase of Iranian oil already at sea, applying to oil loaded on any vessel, including tankers under sanctions, on or before March 20 and discharged by April 19. The crude was priced at a premium of about $7 a barrel to ICE Brent futures. It was not immediately clear when the oil would be delivered, Reuters said. India has staled the oil imports from Iran in May 2019 after US had reimposed sanctions on Tehran. The move intended to starve the Iranian regime of revenue following the U.S. withdrawal from the 2015 Iran nuclear deal, forcing major buyers likeIndia to halt imports. The development comes after India bought Russian crude, who secured more than 40 million barrels to deal with supply crunch from the Middle East.
What is the stance of state refiners?
State-run refiners are reluctant to procure Iranian crude, as apprehensions around operational, financial and regulatory hurdles could outweigh any short-term benefits, a Bloomberg report said.Despite the US sanctions waiver, state-run refiners remained cautious amid the persistent uncertainties linked to shipping, insurance and payment mechanisms have so far prevented deals from being finalised.
In its latest note, Bernstein said that even if crude prices ease below $100 per barrel, they are likely to remain elevated through the year, posing risks to India’s macroeconomic outlook. Factoring in these conditions, the brokerage cut its year-end Nifty target to 26,000.
