BPCL could resume normal purchase of Iranian crude oil, if Iran offers concessions

• BPCL had been purchasing around 2 Million Tonnes (MT) of crude oil from Iran on an average when things were normal

• BPCL's Director (Finance) also said that sourcing of crude oil from the Middle East region will continue, but it will be curtailed

New Delhi: In the backdrop of resumption of indirect dialogue between the US and Iran on the nuclear accord signed between the two in 2015, state-run Bharat Petroleum Corporation Ltd (BPCL) has said that it could resume normal purchase of Iranian crude oil if the OPEC country offers concessions to make its crude oil attractive in comparison to rival grades. Addressing the media on Thursday, BPCL Director (Finance) N Vijayagopal said that BPCL had been purchasing around 2 Million Tonnes (MT) of Iranian crude on an average when things were normal.

"We had been taking 2 million tonnes of Iranian crude oil annually, on an average, when things were normal. We will go back to that number … I won't be taking 6 million tonnes of Iranian oil," said BPCL's head of finance. He added that the purchase of Iranian crude would also depend on the concessions offered by the country in comparison to rival grades.

Iran was India's second-largest supplier of crude before US sanctions kicked in

Iran was India's second-largest supplier of crude oil before the US sanctions were tightened in 2018 by the Donal Trump administration. India halted crude oil imports from Iran in 2019 as temporary waiver granted to India and few other countries by the US expired. Former US President Donald Trump had pulled out of the nuclear accord which was signed between the US government and Iran in 2015 under Barack Obama's presidency. 

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Iran had been offering India discounts on credit period and shipping of crude and was hence a lucrative destination for Indian refiners for sourcing of crude oil. US President Joe Biden and Iran have recently resumed indirect talks to revive the agreement signed in 2015 for Tehran to curb its nuclear activities. If that happens, Indian refiners would be looking to replace some of their spot purchases with Iranian crude.

'BPCL will curtail, but continue purchase of crude from Middle East'

In the backdrop of the Centre's directions to oil PSUs to diversify their crude oil basket, BPCL's Director (Finance) said that the company will be taking these decision from a commercial perspective. He added that while sourcing of crude oil from the Middle East region will continue, but it will be curtailed. "BPCL takes only commercial decisions. We will curtail sourcing of crude from the Middle East in the future but the purchase from the region will continue. Iraq, Saudi Arabia, Abu Dhabi, Oman will be there. The percentage of oil sourced from these countries may differ but the purchase will continue," said Vijayagopal.

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