Oil from Iran comes loaded with discounts

After the United States re-imposed sanctions, India’s crude oil and condensate exports from Iran have dropped below 70 million barrels, shooting up petrol and diesel prices. In August, 8.2 million barrels of oil headed for India, down from over 20 million barrels in each month since April.

The preferential treatment with the Iranian oil comes in the form of the 60-day credit for purchases, double the time given by other producers, and freight discount, which was recently increased from 62 to 80 per cent. According to Shebonti Ray Dadwal, senior fellow at the Institute for Defence Studies and Analyses, considering India’s massive demand for fossil fuel, options like purchasing oil from other Gulf producers, Canada and the US are proving costly.

Iran accounts for around 10 per cent of India’s oil imports. She said Iran, which slipped to eight place from second as India’s oil supplier, had climbed to third spot since 2016. India became Iran’s second-largest market.