Iran's Oil Exports to India Reach Highest Level Since October 2016

Reuters has reported, citing shipping data and industry sources, that Iran's daily oil exports to India reached 705,000 barrels last month, the highest level since October 2016. However, at least two major refineries, which account for 35% of India's total oil imports, are under pressure from U.S. sanctions to reduce their purchases from the Islamic Republic. On Tuesday, June 11, Reuters reported that Iran's oil sales to India in May increased by more than 10% compared to the previous month and by 45% compared to May of last year. The report adds that starting this month, due to the return of U.S. sanctions against Iran, India's oil imports from the Islamic Republic could decline. Several informed sources told Reuters that the Nayara refinery, in which Russia holds a major stake, is reducing its purchases of Iranian oil. This refinery was Iran's largest oil customer in India, buying 200,000 barrels of crude oil per day last month. The Reliance Industries, which has the largest refining capacity in India, also plans to stop importing Iranian oil from October or November. U.S. oil sanctions against Iran are set to begin in November. These sanctions only grant exemptions to customers who significantly reduce their purchases of Iranian oil in each six-month period. The Shana news agency, affiliated with Iran's Ministry of Oil, recently reported that Iran's oil exports reached 2.7 million barrels per day last month, the highest level since the lifting of sanctions. Indian state refineries stopped importing oil from Iran last year. India used this tool to pressure Iran into signing a contract for the development of the Farzad B gas field, and two months ago, Iran's oil minister announced that India and Iran had reached an agreement to develop this project. India also announced that it would increase its oil purchases from Iran. However, after the U.S. withdrawal from the JCPOA, India's oil minister stated that the country would adopt a 'wait and see' policy regarding Iran's sanctions until the impact of U.S. sanctions becomes clear. India is the largest oil customer of Iran after China. In the first five months of the year, India averaged daily purchases of 583,500 barrels of oil from Iran, showing a 6.5% increase compared to the same period last year. OPEC: Iran's Oil Production Increases for the Third Consecutive Month Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) also published its monthly report on Tuesday. OPEC's statistics indicate an increase in Iran's oil production for the third consecutive month, although this increase has not been significant. In May, Iran produced 3 million and 829 thousand barrels of crude oil per day. Meanwhile, according to the agreement between OPEC and its allies led by Russia, Iran should not increase its daily production level beyond 3 million and 790 thousand barrels. In the first five months of the year, Iran produced an average of nearly 30 thousand barrels more than the agreed level. In total, OPEC members produced 31 million and 869 thousand barrels of crude oil per day in May, which is more than 35 thousand barrels higher than in April. Saudi Arabia increased its production by 85 thousand barrels per day; however, the compliance of members with the mentioned agreement has generally been above their commitments. Bloomberg also reported on Monday that Russia raised its oil production to 11 million and 90 thousand barrels in the first week of this month, which is 140 thousand barrels more than its commitment. Bloomberg writes that Saudi Arabia and Russia plan to increase their production due to the decline in global strategic oil reserves. Iran is strongly opposed to increasing production by OPEC and allied countries.