India could buy more crude from Iran in the next four months and intends to increase purchases further in the next fiscal year, its top oil bureaucrat said, after a deal last weekend eased some sanctions on the OPEC member.
India is the first of Tehran's four main buyers to say it is looking to buy more oil from Iran after the agreement in Geneva. The deal with six world powers eased some sanctions on the Middle Eastern nation in exchange for curbs to its nuclear programme.
Although the agreement doesn't allow Iran to boost its oil sales for six months, India has room to increase its imports after they tumbled around 40 percent this year to below even what was permitted by sanctions.
India intends to buy up to an average 220,000 barrels per day (bpd) of oil from Iran in the year ending March 31, Oil Secretary Vivek Rae said on Wednesday.
That's consistent with a goal of cutting India's Iran oil shipments 15 percent this year to win waivers on U.S. sanctions.
But India's April-October imports are running at less than 80 percent of that level, at about 170,000 bpd, meaning India could raise its imports between December and March and still hit the target.
One Indian state-run refiner, Hindustan Petroleum Corp Ltd. , has already said it is ready to look at buying more Iranian oil now that some of the constraints on refinery insurance have been lifted.
Sanction measures dealing with insurance coverage of ships carrying Iranian oil and refineries processing it were among the most effective in cutting Tehran's crude exports.
India would also then be looking to increase imports in the 2014/15 financial year, depending on any further easing of the sanctions, Rae said.
"Iran is a great source of oil ... and once the problems that have been faced by Iran are resolved then we will have more oil available in the market," Rae said.
Western sanctions that pressured Iran towards the deal on Sunday have slashed its exports by more than half to about 1 million bpd and cost it as much as $80 billion in lost revenue since the start