Saudi to Boost Oil Supply to India as Iran Sanctions Kick in

      

Saudi Arabia is set to deliver extra 4 million barrels of its oil to India in November, Reuters reported on Wednesday, citing several sources familiar with the plans, in what could be a Saudi move to replace the loss of Iranian barrels due to the U.S. sanctions on Tehran returning early next month.

According to Reuters sources, Reliance Industries, Hindustan Petroleum, Bharat Petroleum, and Mangalore Refinery Petrochemicals would be looking for an additional 1 million barrels each from the Saudis next month.

One reason for more demand from Saudi Arabia is that the arbitrage for U.S. crude oil cargoes is currently shut, so Indian oil refiners need to procure more oil from Middle Eastern producers, one of the sources said.

Last week, reports emerged that India would buy a total of 9 million barrels of oil from Iran in November, suggesting that India will continue to purchase Iranian crude even after the U.S. sanctions on Tehran return.

India is Iran’s second-largest single oil customer after China and was expected to cut back on Iranian oil purchases, but unlikely to cut off completely the cheap Iranian oil that is suitable for its refineries.