The International Energy Agency on Tuesday said that high oil prices were hurting consumers and could dent fuel demand at a time of slowing global economic activity. But, as a condition of waiver, Indian oil firms will reduce their imports to 14-15 million tonnes, the source said.
State-run Indian refiner Hindustan Petroleum said it may resume buying Iranian oil if India secures a waiver from U.S. sanctions, its chairman MK Surana said on Thursday (November 1).
One unresolved issue is whether the United States will press to disconnect Iranian banks from SWIFT, the worldwide system of interbank transfers headed in Belgium.
The US decision to grant the waivers came after major importers of Iranian crude resisted calls by Washington to end their oil purchases as winter looms. The National Iranian Oil Company (NIOC) has reportedly leased some storage capacity at Dalian. During the summer, however, Iranian oil sales to India averaged much higher, topping out at a record 768,000 bpd during July.
Prices pared earlier losses on Friday after Bloomberg news reported that U.S. President Donald Trump wants to reach an agreement on trade with Chinese President Xi Jinping at the Group of 20 nations summit in Argentina later this month and has asked key U.S. officials to begin drafting potential terms.
The US has broadly agreed to grant India a waiver from Iran sanctions after the Indian side chose to cut oil imports from Tehran by about a third in 2018-19, sources familiar with the matter said, adding that an official announcement could be made over the next few days.
"Our goal remains to get to zero oil purchases from Iran as quickly as possible. The United States government now is in the middle of an internal process to consider significant reduction exemptions for individual countries".
Iran said on Friday the report on waivers showed that the market needed the country's crude.
India had imported about 22 million tonnes of crude oil from Iran in 2017-18 and initially planned to raise that to about 30 million tonnes in 2018-19.
Iran's biggest oil customers - all in Asia - have been seeking sanctions waivers to allow them to continue buying some of its oil and have argued that a total ban would spur a further rally in the price of crude.
The impending oil sanctions have been a USA tool to pressure Iran in the six months since President Donald Trump backed out of the 2015 nuclear deal between the Middle East nation and six world powers, saying it didn't do enough to constrain the Islamic Republic's nuclear program or curb what the US calls other "malign activity" in the region.