India leads Asian cuts in Iran oil imports ahead of sanctions waiver

NEW DELHI // India has slashed Iranian oil imports by almost a fifth since December, the sharpest cut among Asian buyers, in a move that should increase its chances of winning a new US waiver next month on sanctions targeting oil trade with Iran.

Sanctions imposed by the United States and Europe to force a halt to a controversial nuclear programme that Tehran says is for peaceful purposes saw Iran's oil exports more than halve last year, costing it Dh18.35 billion a month in lost revenue.

The sanctions have forced refiners in India, Iran's second-largest oil buyer, to reduce imports because national insurer the General Insurance Corp of India has said that cover and losses on processing the crude would not be payable by European reinsurers.

Local insurers rely on reinsurers, who are mostly based in Europe and the United States, to share the financial burden in case of claims on equipment worth billions of dollars.

The United States in June will review the 180-day exceptions granted to Asian importers that make continuous reductions in oil purchases from Iran. Waivers allow Iranian imports without the risk of being cut off from the US financial system.

Refiners want to continue using the Iranian crude many of their plants are configured to process, as changes will need lengthy testing of new grades or cause an alteration in output.

"We are hopeful that India will get a waiver again because of this forced cut in imports," said an Indian government source, who was not authorised to talk to media.

Officials in Iran's top customer China, which cut its oil imports by 3 percent from the previous waiver period, also expect to have their country's waiver renewed. South Korea has increased its Iranian imports and is sending a delegation to the United States to discuss its continued exemption from sanctions.

Waivers on US sanctions have been granted twice to China, India, South Korea and other Asian buyers. Japan, another top buyer, won its third exemption during an earlier review period.

A US State Department spokesman said it was too early to tell if Asian buyers would get waiver renewals next month.

Overall, December to April Iranian oil imports by China, India and South Korea were nearly unchanged at 833,000 barrels per day, compared with the previous six-month period, according to customs and trade data and a loading programme.