News | India Slashes Iran Oil Buy; New UAE Pipeline to Skirt Strait of Hormuz
08 Jun 2012 00:10
Press Roundup provides a selected summary of news from the Farsi and Arabic press and excerpts where the source is in English. Tehran Bureau has not verified these stories and does not vouch for their accuracy. Any views expressed are the authors' own. Please refer to the Media Guide to help put the stories in perspective. You can follow breaking news stories on our Twitter feed.1:10 p.m. IRDT, 19 Khordad/June 8 Indian refiners cut their their imports of Iranian oil by 38 percent in May compared to a year ago, the second consecutive month of major reductions as New Delhi seeks a waiver from banking sanctions the United States has announced it will impose on countries that do not "substantially" reduce purchases from Iran. The drop in Indian imports of Iranian oil in April versus last year was nearly 40 percent. Reuters reports,
Falling imports from the OPEC member have pushed Iran to fifth position in the list of India's crude suppliers in April-May, compared with the third position it enjoyed a year ago and second in the first quarter of 2012.
Refiners are expected to cut volumes they ink under term deals that started April 1 by more than 20 percent, according to Reuters calculations, while the government says it aims for imports to be down 11 percent from 2011/12 liftings to about 310,000 bpd.
Indian refiners may lift significantly lower volumes out of Iran from July, when European sanctions will severely reduce the availability of insurance cover for cargoes and vessels. Among Iran's other Asian buyers, South Korea plans to halt all imports by the time the European measures hit, industry sources have said, and Japan could follow suit unless Tokyo provides a sovereign insurance guarantee for oil tankers.
Indian refiners have been asked privately by the government to cut Iranian oil imports by at least 15 percent, even though publicly New Delhi does not support unilateral sanctions, according to government officials.
With a European Union embargo of Iranian oil purchases set to begin July 1, Algerian Oil Minister Youcef Yousfi declared Thursday that there is sufficient oil supply to make up for expected further declines in Iran's oil exports. "Yes, there is enough oil in the market," said Yousfi.
Algeria is one of Iran's partners in the OPEC cartel, many of whose dozen members have been stepping up production as long-time purchasers of Iranian crude search for new suppliers. For more on the outlook for Iran's international oil trade, see Tehran Bureau's 2012 Iranian Oil Survey.
Motivated in part by Iran's repeated threats earlier this year to retaliate for Western sanctions by disrupting traffic through the Strait of Hormuz, the sea lane through which 20 percent of the world's traded oil passes, the United Arab Emirates is about to open a pipeline that will allow it to reroute most of the oil it sells to the Indian Ocean port of Fujairah, avoiding the strait. The Associated Press reports,
At the moment, Emirati oil exports are loaded in the Gulf and must pass through Hormuz. Once it's running at full volume, the pipeline will let the UAE get two-thirds of its peak oil production to market even if the strait is shut. That's about 10 percent of the total 17 million barrels of oil a day that currently goes through Hormuz.
The director general of Fujairah municipality, Mohammed Saif al-Afkham, told The Associated Press he expects the pipeline to be commissioned this month. [...]
"If there are effective bypass routes, it makes it less likely that Iran would try to block [the strait]," said Robin Mills, head of consulting at Manaar Energy Consulting & Project Management in Dubai. [...]
A longstanding tussle over three Gulf islands claimed by the Emirates and Iran along the shipping lanes approaching the Strait of Hormuz continues to fester. The dispute flared up again last week when the commander of Iran's powerful Revolutionary Guard traveled to the islands, almost a month after a similar visit by President Mahmoud Ahmadinejad.
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