India's growth path gets slippery over oil worries
Updated: February 23, 2012 22:38 IST
With Iran facing Western sanctions over its N-programme and brent crude oil prices touching new highs, India's oil import bill is expected to go for a toss. India consumes 3.182 million barrel oil per day out of which it imports 3.06 million barrel. Last year, India's import bill stood at $106 billion but is likley to be much higher this year. Brent crude oil is hovering around $120 a barrel with supply worries outmatching weak economic data in Europe and China that cast doubt on the global growth outlook.
With Iran facing sanctions from most Western nations over its nuclear programme and Brent crude oil prices touching new highs, India is starting to look to diversifying its oil suppliers.
India consumes 3.182 million barrels of oil per day, of which nearly 3.06 million barrels are imported from around the world. Here are India's top 10 oil suppliers, seven of whom are in the Middle-East, underlining its strategic interests in that part of the world.
Saudi Arabia, 27 million tonne (MT); Iran, 19 MT; Iraq, 15 MT; Nigeria, 13 MT; Kuwait, 12 MT; UAE, 11.5 MT; Angola, 9 MT Venezuela, 7 MT; Oman, 5 MT; Qatar, 5 MT.
Iran is the second largest supplier of crude to India. India has found it difficult to route oil payments through some banks because of international sanctions on Iran. Earlier, payments for crude were made through multilateral settlement mechanisms, which stopped around a year ago due to UN-imposed sanctions. MRPL is the biggest importer of Iranian crude oil at about 150,000 barrels a day.
Reports say companies may look at other sources of crude oil. India imports around 400,000 barrels a day of crude from Iran and the monthly payout is around $1 billion.
To fulfil its oil requirements, India has sought an additional 5 million tonnes (MT) of crude oil from Saudi Arabia for next fiscal.
“Whatever Indian oil markets will require, they will approach (Saudi) Aramco (Saudi Arabia's national oil company) and as long as they can work it out on a commercial basis, we as a government don't interfere in this commercial relationship,” Abdul Aziz Bin Salman bin Abdulaziz, assistant minister for petroleum affairs, Saudi Arabia has said.
Last year, India's import bill stood at $106 billion; but is likely to go through the roof with Brent crude hovering at about $120 a barrel. With supply worries and weak economic data in Europe and China, a dark cloud hangs over global growth outlook.
The Iran–Pakistan–India gas pipeline, also known as the IPI pipeline or the Peace pipeline, was meant to deliver natural gas from Iran to Pakistan and India.
In February 2007, India and Pakistan agreed to pay Iran $4.93 per million British thermal units ($4.67/GJ); but some details relating to price adjustment remained open to further negotiations.
In 2009, India withdrew from the project over pricing and security issues, and after signing a civilian nuclear deal with the United States in 2008.
