REUTERS

NEW DELHI INDIAN refiners cut imports from Iran by 38 percent in May from a year ago, tanker discharge data showed, in a second month of steep reductions as they switch suppliers to cushion the impact of new US sanctions on Tehran.

The cutbacks raise New Delhi’s chances of winning a waiver similar to that granted by the United States to Japan and some European countries after “substantial” reductions in their imports.

India is discussing with Washington an exemption from the sanctions, which focus on banking and are being imposed over Iran’s disputed nuclear programme, a source said last month.

China and India are Iran’s biggest crude clients and reductions in their purchases are crucial to Western attempts to crank up the pressure on Tehran. Neither has officially sought a waiver, although both have cut volumes.

India imported about 243,000 barrels per day (bpd) of oil from Iran in May, down about 10 percent from April and about 38 percent from 394,000 bpd a year ago, the data made available to Reuters showed. In April - the first month of new contracts - imports from Iran slid nearly 40 percent from a year ago.

Falling imports from the OPEC member have pushed Iran to fifth position in the list of India’s crude suppliers in April-May, compared with the third position it enjoyed a year ago and second in the first quarter of 2012.

Refiners are expected to cut volumes they ink under term deals that started April 1 by more than 20 percent, according to Reuters calculations, while the government says it aims for imports to be down 11 percent from 2011/12 liftings to about 310,000 bpd.

Indian refiners may lift significantly lower volumes out of Iran from July, when European sanctions will severely reduce the availability of insurance cover for cargoes and vessels.

Among Iran’s other Asian buyers, South Korea plans to halt all imports by the time the European measures hit, industry sources have said, and Japan could follow suit unless Tokyo provides a sovereign insurance guarantee for oil tankers.

Indian refiners have been asked privately by the government to cut Iranian oil imports by at least 15 percent, even though publicly New Delhi does not support unilateral sanctions, according to government officials.

The refiners are making up for the shortfall in Iranian cargoes by raising imports from the world’s biggest exporter, Saudi Arabia, as well as fellow OPEC member Iraq.

The 12-member Organisation of the Petroleum Exporting Countries (OPEC) pumped 31.80 million bpd in May, up from 31.75 million bpd in April, a Reuters survey of sources at oil companies, OPEC officials and analysts found.