Saudi Aramco to supply Indian Oil Corp an additional two million barrels of oil per month

Saudi Arabian natural gas firm Saudi Aramco has agreed to supply state-run Indian Oil Corporation Ltd an extra two million barrels of crude oil a month from July to December, Reuters reported on Friday. IOCL will also import oil from the United States.

IOCL’s agreements come in the wake of curbs on Iranian oil imports following US sanctions on Iran. The United States has allowed India, China, South Korea, Japan, Greece, Taiwan, Turkey and Italy to temporarily import oil from Iran without sanctions. Italy, Greece and Taiwan have already stopped buying oil from Iran. However, last month, the United States decided not to renew the waivers. Around 10% of India’s oil imports came from Iran.

“We have tied up supplies from alternate sources,” IOCL Chairperson Sanjiv Singh told reporters according to . “No single country can make up for the volumes lost, that’s why we are keeping our sourcing diversified. We are fairly diversified in our sourcing and we have robust sourcing in place to make up for all of the Iranian oil.”

India also signed term import contracts with two US suppliers, Singh said. As much as 4.6 million tonnes of crude oil will be imported in 2019, he added. These suppliers are the Norwegian firm Equinor and the Algerian national oil company Sonatrach.

IOCL Director (Finance AK Sharma said the company has signed an annual contract to buy 5.6 million tonnes of oil from Saudi Arabia. On top of this, it has the oon to buy an additional two million tonnes, he added.

“The US was to take a decision on waiver extension in April and Indian refineries had prepared plans for all eventualities,” Singh said. “We have alternate sources lined up to make up for any shortfall.”

Earlier this month, India reiterated its stance that it is prepared to deal with the impact of the sanctions imposed by the United States on buying oil from Iran. Ministry of External Affairs spokesperson Raveesh Kumar said that New Delhi’s decision will be based on the country’s energy security, commercial consideration and economic interests.