Iran offered freight discount on oil sales to India

Vastavam web: Iran has offered to raise the freight discount on oil sales to India in return for New Delhi agreeing to boost imports, as the OPEC member is keen to eat into the market share of other producers including top rivals Saudi Arabia and Iraq.Iran is pushing to retain customers for its oil in Asia, hoping concessions will boost the appeal of its crude compared with other Middle Eastern suppliers, even as the threat looms of potential further U.S. sanctions on the country.For 2017/18 Tehran had reduced the discount to 62 percent of the formula from 80 percent, but Iran has offered to change this if Indian refineries step up purchases, three sources familiar with the matter said on Saturday.

“State-owned Indian companies are going to increase their level of Iranian oil purchase,” Iran’s oil minister Bijan Zanganeh told reporters after a meeting with Indian oil minister Dharmendra Pradhan in New Delhi.Indian refiners – state-owned and private – will buy about 500,000 bpd of Iranian oil in 2018/19, said Zanganeh, in India as part of a delegation led by Iranian President Hassan Rouhani.

Indian refiners – state-owned and private – will buy about 500,000 bpd of Iranian oil in 2018/19, said Zanganeh, in India as part of a delegation led by Iranian President Hassan Rouhani.Supplies from Iran were down as state refiners, which account for about two-third of India’s nearly 5 million barrels per day (bpd) demand, curbed imports in protest at Tehran’s move to grant development rights for the giant Farzad B gas field to others.

“We have got good incentives compared to other major producers. We will get benefit if we buy from Iran … We will boost oil imports from Iran compared to this fiscal year,” Pradhan told reporters, without elaborating.The freight discount offered by Iran will translate to a discount of up to $1 a barrel, one of the sources told.

Pradhan said India had also sought a stake in Iran’s South Azadegan oil field. He said Tehran had not made any commitment on India’s request, but was willing to show data on some fields to an Indian delegation next week in Tehran.India recently offered a development plan worth about $6 billion for Farzad B and sought gas pricing of about $4 per million British thermal units (mmBtu) to earn double-digit returns.