India’s Oil Minister M Veerappa Moily says his country plans to increase its crude oil imports from Iran in a bid to save over USD 8.5 billion in hard currency.
“An additional import of 11 million tons during 2013-14 would result in reduction in forex outflow by USD 8.47 billion,” Moily has written in an August 30 letter to Indian Prime Minister Manmohan Singh. He added that India has so far imported nearly two million tons of crude oil from Iran during the current fiscal year. The plan is in response to the Indian prime minister’s call for a USD 25 billion cut in oil import bill in view of narrowing the current account deficit. India is among Asia’s major importers of energy and relies on the Islamic Republic of Iran to satisfy a portion of its energy demand. India is reportedly seeking to devise a mechanism to provide a state guarantee to refineries importing oil from Iran, whose energy sector has been targeted by US-led sanctions. In June, India won a 180-day waiver from US sanctions targeting oil trade with Iran. India’s crude oil imports from Iran increased by 21.1 percent in June 2013 compared to a year earlier. The refineries had previously been unable to carry out imports from Iran as international insurance agencies are barred from covering deals with Tehran due to the US-led sanctions against the Islamic Republic. Iran had previously offered to provide sovereign guarantees of its own for tankers shipping its crude oil to India.