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IndianOil to cut oil imports from US sanctions-hit Iran by 23%

State-owned Indian Oil Corporation Ltd (IOCL) plans to cut crude oil imports from Iran by over 23 per cent in the current financial year (2013-14), Petroleum Minister M Veerappa Moily said on Tuesday. IndianOil imported 1.566 million tonnes of oil from Iran in the 2012-13 financial year.

For the year beginning April 2013, it "has entered into a term contract for import of 1.2 million tonnes crude oil from Iran," he said in a written reply to a question in Rajya Sabha here.

IOC, which is India's third largest importer of Iranian oil behind Essar Oil and Mangalore Refinery and Petrochemicals Ltd, imported 0.577 million tonnes of oil from Iran during April-June quarter of current fiscal.

Moily said IOC imported oil worth $1.262 billion in 2012-13 from Iran. Of this, $653.015 million in rupee and $415.140 million in euros through a Turkish bank. $194.31 million remains to be paid from 2012-13. Of the current year purchases, IOC has paid $193.09 million in rupee and $235.99 million balance remains, he said.

India slashed import of crude oil from Iran by over 26.5 per cent in the financial year ended March 31 as US and European sanctions made it difficult to ship oil from the Persian Gulf nation.

The nation imported about 13.3 million tonnes of crude oil from Iran in 2012-13 fiscal, down from 18.1 million tonnes shipped in the previous financial year. The decline in shipments to the world's fourth-largest oil importer was sharper than Iran's other two big buyers, China and South Korea, as New Delhi struggled with insurance and payment problems. While India can't deposit dollars or euros in any foreign bank for importing crude from Iran because of the sanctions, insurance companies are refusing to cover refineries that use oil from the Persian Gulf nation.

In 2012-13, Iran has slipped three places to become India's sixth-largest crude oil supplier behind Saudi Arabia, Iraq, Venezuela, Kuwait and the UAE.

India, which relies on import for 79 per cent of its oil needs, bought 182.5 million tonnes crude in 2012-13. In the previous fiscal it imported 171.7 million tonnes of crude oil, up from 163.4 million tonnes in 2010-11 and 159.2 million tonnes of 2009-10.
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