(LiveMint)
US sanctions against Iranian oil exports take effect on 4 November, but the impact is already starting to show. India’s crude oil imports from Iran fell in the first half of August, according to a report by Edelweiss Securities Ltd, citing data from FGE, a global oil and gas consultancy. The accompanying chart has the details. A weaker August comes after a strong July. The US sanctions are expected to make it challenging for India to sustain oil imports from Iran, its third-biggest crude supplier.
“As India explores alternative supplies, import costs are likely to rise as Iran offers extremely competitive terms, which include, among others, free shipping and extended credit terms of about 60 days,” Edelweiss said in its report. Note that the Indian rupee is weak too, which will weigh on import costs.
Of course, this assessment on Iran’s crude oil exports for August could prove to be premature, as data is for the first half of this month only. One will have to wait to see how the rest of the month shapes up. Typically, exports tend to be skewed towards the second half every month.
