India has sought 5 million tonnes more crude oil from Saudi Arabia for 2012-13. Saudi Arabia is the biggest oil supplier to India.
The Petroleum Minister, Mr S. Jaipal Reddy, said that at the bilateral talks between Saudi Arabia and India here today, India has sought more crude oil from the West Asian nation. The Minister said: “We have sought 4-5 mt more for each passing year.”
The discussions between Saudi Arabia and India are significant as they come at a time of heightened uncertainty in the international oil markets. Saudi Arabia supplied 27 mt of crude oil to India during 2010-11, making it India’s largest crude oil supplier.
Prince Abdul Aziz Bin Salman Bin Abdulaziz, Assistant Minister for Petroleum Affairs, Saudi Arabia, held bilateral discussions with Mr R.P.N. Singh, Minister of State for Petroleum & Natural Gas.
Asked whether India is seeking more crude oil supplies from Saudi Arabia in the backdrop of ongoing uncertainty of supplies from Iran, Mr Reddy said, India’s relations with Saudi Arabia had nothing to do with its relations with other countries, including Iran. Crude oil supplies from Iran are expected to be at the same level as the previous year, he said.
Mr Reddy said that India needs more supplies as in spite of the volatility in crude oil and petroleum product prices, growth rate of domestic consumption of petroleum products is maintaining a high momentum. The country needs more oil not only for this year but for future also, he said.
Oil refiners tread cautiously
Domestic oil refiners such as Hindustan Petroleum Corporation, Bharat Petroleum Corporation and Mangalore Refinery and Petrochemicals Ltd have been treading cautiously for supplies from Iran following the sanctions. The refiners have been turning to Saudi Arabia for imports.
According to reports, while India has said it will not implement the sanctions, it, along with China and Japan, are planning cuts of at least 10 per cent in Iranian crude oil imports, as the US sanctions make it difficult for them to keep doing business with Iran.
While Hindustan Petroleum Corporation has already said it will cut Iranian imports by about 15 per cent for its annual contract, private refiner Essar Oil is taking its full volume.