India's Iran oil imports rise 13.5 per cent in May against April

India imported 13.5 per cent more Iranian oil in May compared with April as the country's biggest refiner Indian Oil Corporation (IOC) bought crude from Tehran after a three-month break, tanker data obtained from trade sources showed.

India, Iran's top client after China, imported about 255,200 barrels per day (bpd) of Iranian oil last month, down 0.6 per cent from a year ago, according to tanker arrival schedules from sources and data compiled by Thomson Reuters Oil Analytics.

India's intake of Iranian oil in January-May rose about 38 per cent from the previous year as refiners ramped up imports in the first quarter to meet a target of buying 220,000 bpd crude from Tehran in the fiscal year that ended March 31, 2014.

Indian refiners had the room to make the larger purchases in the first quarter due to deep cuts in calendar 2013 of nearly 40 per cent, the largest reduction by Iran's top clients - which besides China and India, also include Japan and South Korea.

State-run Mangalore Refinery and Petrochemical (MRPL) did not import Iranian oil for the April-July period in 2013 due to insurance problems triggered by western sanctions, while Hindustan Petroleum Corp halted purchases from the OPEC member and has yet to resume shipments.

Essar Oil was Iran's top Indian oil client in May, followed by MRPL, the data showed. IOC took one very large crude carrier, or 2 million barrels of Iranian oil last month, after not making any purchase from Tehran since January, the data showed.

Iranian oil accounted for about 6.5 per cent of India's overall crude purchases in May, the tanker arrival data showed. In comparison, Iran accounted for 16.4 per cent of India's oil imports in 2008/09 and 5.7 per cent in 2013/14.Tehran was the sixth largest crude supplier to India in May, recovering from the eighth spot in April, the data showed.

Overall, India imported about 3.92 million bpd of crude May, down 5.7 per cent from the last month, the data showed.

Asian buyers are expected to import about 1.25 million-1.3 million bpd of Iranian oil in the six months through June, as China is taking more than it did before toughened sanctions were put in place in 2012.

Western powers had wanted to restrict Iranian oil exports to about 1 million bpd under the terms of the Geneva accord implemented on January 20, but the deal's silence on condensates has given refiners and Tehran an opportunity to trade in the light crude without breaching sanctions.

US officials say that the Iranian exports exceeding 1 million bpd are within the tolerance of what is allowed because most of the overage is condensate bought by China and Japan.

India mainly takes standard crude grades from Iran, with only private refiner Essar Oil importing a small quantity of condensate.

(Reuters)