Deadlocked talks with the UAE have pushed India to Iran's lap for purchase of 6 million barrels of crude as New Delhi is boosting its strategic oil reserves, a report says.
India has stepped up oil purchases from Iran, lifting nearly 600,000 barrels per day from the Middle Eastern nation last month, the highest level in 15 years.
Indian refineries are now angling for extra purchases from Iran because New Delhi's negotiations with the United Arab Emirates for supplies are stuck over commercial terms, Reuters reported on Tuesday.
The National Iranian Oil Company (NIOC) will supply Iranian Mix grade to fill half the Mangalore storage facility in the southwestern state of Karnataka, the news agency said, citing informed industry sources.
State firm Bharat Petroleum Corp will buy 4 million barrels in two very large crude carriers (VLCCs) and Mangalore Refineries and Petrochemicals Ltd will import 2 million barrels, it added.
"The two refiners decided to buy Iranian Mix as it suits their refineries," Reuters reported, citing one of the sources.
India is building a strategic emergency storage in the country’s vast underground caverns to protect its growing economy against possible market hiccups.
Last week, officials discussed new oil purchases from Iran with NIOC Deputy Director for Marketing and Operations Safar Ali Keramati who said if the Indians “come to us for extra barrels, then we will do our best to accommodate their demand."
India’s purchases will be a fresh boost to Iran’s drive to regain its market share through ramped-up production after the lifting of US-led sanctions.
New shipments will bring Iran closer to levels before the sanctions in 2012 when the country exported about 2.3 million barrels of oil per day.
They could also put Iran in a position to join a fresh bid for capping oil production when major producers meet in Algeria later this month.
Tehran has said it supports any move to stabilize the market but will join the production freeze program when its own output returns to pre-sanction levels.