Iranian oil exports to India hit a five year high in July, as the Islamic Republic shipped 523,000 barrels of crude per day to the Indian sub-continent.
Historically, Iran had been India’s second biggest supplier of crude oil, behind regional rival Saudi Arabia. However, international sanctions against the Islamic Republic meant that India had to look elsewhere for its crude supplies.
Iran is now ramping up production levels and produced 3.62 million barrels per day in July, compared with 2.8 million bpd in 2015.
As Iran has increased its production levels, India has been consistently increasing the amount of crude it lifts from Iran. July marked the second time in the last six months that India had imported more than 500,000 bpd of Iranian crude. According to a report in the Economic Times of India, Indian imports of Iranian oil have increased by 48 per cent in the first four months of this fiscal year, to average 420,000 bpd over four months.
Iran has some way to go if it is to regain its crown as India’s second biggest supplier. Currently Saudi Arabia, Iraq and Venezuela all export more oil to the sub-continent than Iran. However, with the light, easy to process nature of Iranian crude, Iran will hope to make inroads at the expense of other producers, most likely Venezuela. Iran’s proximity to India will also give it a competitive edge over non-Middle East producers.