Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.


Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence


Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
LIVE TV DownloadNews18 App
3-min read

US Sanctions Against Iran: Govt Says No Issues With Oil Supplies, Sentiment Hurting Price

Refusing to say if India has sought a waiver of sanctions from the US as to continue purchasing crude oil from Iran, Oil Minister Dharmendra Pradhan said he has articulated the country's position and "there is nothing new to repeat."


Updated:October 16, 2018, 3:36 PM IST
US Sanctions Against Iran: Govt Says No Issues With Oil Supplies, Sentiment Hurting Price
Oil minister Dharmendra Pradhan during a press briefing.

New Delhi: Ahead of the US sanctions against Iran, India on Tuesday said availability of crude oil to replace lost volumes is not an issue but the "sentiment" around losing a big oil supplier is driving prices higher.

Refusing to say if India has sought a waiver of sanctions from the US as to continue purchasing crude oil from Iran, Oil Minister Dharmendra Pradhan said he has articulated the country's position on importing oil from the Persian Gulf nation in November and "there is nothing new to repeat."

Last week, Pradhan said two state-owned oil refiners have booked import of 1.25 million tonne (MT) of crude oil from Iran in November. US President Donald Trump in May withdrew from the 2015 nuclear accord with Iran, reimposing economic sanctions against the Persian Gulf nation.

Some sanctions took effect from August 6, while those affecting the oil and banking sectors will start from November 4. Those sanctions would block banking channels, making payment for oil bought from Iran difficult as well as stop re-insurance cover to refineries processing such oil.

"There is no issue of availability of crude oil today. But due to geopolitical uncertainty in different parts of the world, there is a sentimental issue. That is the primary challenge," Pradhan told reporters on the sidelines of India Energy Forum here. "From day one, we are confident that there is no problem in sourcing of crude. There is plenty available in different parts of the world."

The sentiment in the market that going out of a big oil producer from the market may hamper supplies, is impacting prices and causing volatility in the market.

"Issue is not shortfall. Issue is sentiment," he said.

Oil prices hit a four-year high of USD 86.74 a barrel earlier this month as the market grapples with the expected loss of Iranian exports due to the US sanctions. Rates have cooled to around USD 81 in hope that the US may extend deadline for imposing sanctions on Iran by a couple of months.

IHS Markit vice chairman Daniel Yergin, who was present along with Pradhan while addressing reporters, said oil markets have a sentiment problem and not a supply issue.

"Oil market is physically balanced but emotionally unbalanced because of uncertainty, because of geopolitical issues. That is what is impacting the price," he said.

Pradhan said oil cartel OPEC has to ensure market stability that is beneficial to both consuming and producing countries.

OPEC, he said, had in June decided to raise production by 1 million barrels per day. While Saudi Arabia and Russia have increased production, "according to our information some of the (OPEC) countries are lagging behind."

On Monday, officials in the government and oil companies said Indian firms like IOC have optional volumes built in their annual crude oil purchase contracts with suppliers like Saudi Arabia and Iraq that will be more than enough to make up for any shortfall in supplies from sanction-hit Iran.

India had contracted to import about 25 MT of crude oil from Iran in 2018-19, up from 22.6 MT imported in 2017-18.

Out of this, supplies in the first seven months, till October, have not been impacted. For the remainder, enough cushion is available to avert any supply disruption, they had said.

"When oil companies enter into annual term contracts for buying crude oil, there are two components mentioned - firm supplies and optional supplies. Firm volumes are the ones that oil companies commit to necessarily take and there is an optional volume on top of it which they can dip into if the need arises," a top official at a state-run refiner said.

"These optional volumes can be taken at any time of the year and would be more than sufficient to make up for any shortfall that may arise because of the US sanctions against Iran."

India, the world's third-biggest oil consumer, meets more than 80 per cent of its oil needs through imports. Iran is its third-largest supplier after Iraq and Saudi Arabia and meets about 10 per cent of the total needs.

Last week, Pradhan said Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals (MRPL) have together placed orders for import of 1.25 MT of crude oil from Iran.

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months. Use code FREEDOM.

Read full article
Next Story
Next Story

Also Watch

Most Active
Company Price Change %Gain
Indiabulls Hsg 536.85 -2.52
Yes Bank 76.65 -3.52
Reliance 1,292.60 1.14
HDFC Life 524.55 -2.89
Axis Bank 685.00 1.38
Company Price Change %Gain
IndiGrid InvIT 86.50 -1.59
Indiabulls Hsg 536.55 -2.64
Yes Bank 76.70 -3.46
Reliance 1,292.10 1.15
HDFC Life 524.35 -2.95
Top Gainers
Company Price Change %Gain
Sun Pharma 426.00 2.72
Bharti Infratel 255.30 2.45
Tech Mahindra 670.35 1.72
Axis Bank 685.00 1.38
Larsen 1,352.20 1.27
Company Price Change %Gain
Sun Pharma 425.80 2.66
Axis Bank 685.00 1.40
Larsen 1,352.20 1.30
Reliance 1,292.10 1.15
ICICI Bank 423.40 1.01
Top Losers
Company Price Change %Gain
Yes Bank 76.65 -3.52
Grasim 732.35 -2.65
Indiabulls Hsg 536.85 -2.52
Power Grid Corp 207.05 -1.94
GAIL 127.30 -1.81
Company Price Change %Gain
Yes Bank 76.70 -3.46
Power Grid Corp 207.10 -1.96
ONGC 126.25 -1.48
SBI 286.70 -1.46
Coal India 199.05 -1.39

Live TV

Countdown To Elections Results
To Assembly Elections 2018 Results