India to Double Its Oil Purchases from Iran

Reports indicate that India's state refineries plan to double their oil imports from Iran for the current financial year. India's financial year begins almost simultaneously with Iran's solar year. Several informed sources told Reuters on Friday, April 6, that the reason for this is financial incentives and favorable conditions offered by Iran. According to the report, Iran has recently offered greater discounts on oil shipments to India in exchange for increased oil sales. India is the second-largest buyer of Iranian oil after China, but due to Iran's refusal to sign a contract for the development of the Farzad B gas field with India, the country reduced its oil purchases from Iran last year. Indian state refineries purchased 205,600 barrels of oil from Iran daily last financial year, but they plan to buy 396,000 barrels daily this year. Indian government statistics show that before sanctions, Iran was the second-largest supplier of oil to the country, but it has now fallen to third place after Saudi Arabia and Iraq. The report adds that the Indian oil minister recently announced, after a meeting in February with his Iranian counterpart Bijan Namdar Zangeneh, that state refineries intend to increase oil imports from Iran this year. India is the third-largest oil importer in the world, and its state refineries account for half of the country's daily imports of 5 million barrels. Reuters reported, citing Zangeneh, that both private and state refineries in India have planned to import 500,000 barrels of oil from Iran this financial year, but one source told the news agency that total daily oil exports from Iran to this country could reach 600,000 barrels this year. Another source stated that Iran's proposed terms are better than those of other oil exporters. The significant increase in India's oil intake from Iran comes as Reuters reported on Wednesday that the Indian company ONGC has made a $3 to $4 billion proposal to Iran for the development of the Farzad B gas field. This company discovered the mentioned gas field in the Persian Gulf in 2008, but the parties have yet to reach an agreement on its development. Reuters writes that Zangeneh requested in the February meeting with his Indian counterpart that the Indian company submit a new proposal for the development of this project, and now ONGC has delivered its proposal to Iran. According to sources, the new proposal only considers the development and production of gas from the field. Previously, the same Indian company had submitted an $11 billion proposal for the development of the field and the construction of a pipeline to transport gas to India, which was not accepted by Iran, and ultimately last year, the Indian government asked its refineries to reduce oil imports from Iran to pressure the country. The National Iranian Oil Company and ONGC are set to negotiate the new proposal next week. Iran had previously signed an agreement with Russia's Gazprom to study this field and stated that if the Russians make a better proposal, they would hand over the Farzad B field to them. Recently, Russia announced that its oil companies could invest up to $50 billion in Iran. Last month, Zarubezhneft, a Russian company, signed a contract to develop two oil fields, Aban and Paydar-e Gharb, with Iran. The value of this contract was $741 million, and the Russian company will hold an 80% stake in these projects.