Reliance buys Iranian oil after 6-year hiatus, looking for long-term fixed quantity deal

Reliance Industries has bought crude oil from Iran after a 6-year break and is looking to strike a long-term fixed quantity deal, post lifting of sanctions. RIL, which operates the world's biggest refining complex at Jamnagar in Gujarat, is looking at quickly ramping up purchases to the earlier levels of about 5 million tonnes a year. "Re-established relationship with Iran, sourced crude oil post lifting of sanctions," the company said in an investor presentation after reporting 2015-16 earnings. Bowing to international pressure to isolate Iran over its nuclear programme, RIL in January 2009 had stopped exporting gasoline or petrol to Iran. And from February 2010, it stopped buying crude oil from the West Asian nation. RIL, which has substantial investments in US shale gas projects, besides being a big supplier of fuel, shelved its business with Iran over fears of being sanctioned. With sanctions on Iran ending in January this year, RIL has re-established its ties with the country. Its joint CFO V Srikanth, in a press briefing in Mumbai on Friday, said the company is engaged in talks with Iran for bigger supplies, including a term or annual fixed quantity contract. 

"We have had engagements with Iran before the sanctions and they have grades of crude that are attractive to us," he added. Mangalore Refinery and Petrochemicals Ltd (MRPL) and Essar Oil Ltd are the main buyers of Iranian oil in India, importing between them about 10 million tonnes a year. Besides, Indian Oil Corp (IOC) is looking at doubling imports from Iran to 4 mt this year. Hindustan Petroleum Corp Ltd (HPCL) too may pick up small quantities this year.