MOSCOW (MRC) -- Iran overtook political rival Saudi Arabia as India's top oil supplier in October, shipping data showed, just ahead of a producers' meeting this month to hammer out the details on output cuts aimed at reining in a global glut, as per Hydrocarbonprocessing.
Iran used to be India's second-biggest oil supplier, a position it ceded to Iraq after tough Western sanctions over its nuclear development program limited Tehran's exports and access to finance.
But India's oil imports from Iran have shot up this year after those sanctions were lifted in January. In October they surged more than threefold compared with the same month last year, rising to 789,000 bpd, according to ship tracking data and a report compiled by Thomson Reuters Oil Research and Forecasts.
Iran's surge to the No.1 spot is due partly to less available crude from Saudi Arabia, which has increased its capacity to refine oil instead of just exporting more crude.
"Saudi Arabia's refining capacity has increased over time so it is not in a position to increase its exports further, whereas Iran is better placed to raise its output and sales to India," said Ehsaan Ul Haq of U.K.-based consultancy KBC Energy.
Indian refiners including Reliance Industries Ltd, operator of the world's biggest refinery complex at Jamnagar, that had stopped imports from Iran during the sanctions period have also returned as buyers of Iranian oil.
Iran produces almost 4 million bpd of oil and exports 2.4 million bpd. Tehran's exports dropped to 1 million bpd during sanctions, down from a peak of almost 3 million bpd in 2011, before tougher Western sanctions were implemented.
Gaining the top position as oil supplier to the world's third-biggest importer, even if only for one month, comes at a sensitive time.
As MRC reported earlier, India's daily oil imports from Iran in August surged to their highest in at least 15 years as the OPEC producer boosted its shipments to recoup market share ceded to rivals Saudi Arabia and Iraq under pressure from economic sanctions. Private refiner, Essar Oil, was the top Indian client of Iran in August, followed by Indian Oil Corp. and Mangalore Refinery and Petrochemicals Ltd. India received about 576 Mbpd of Iranian oil in August, up about 10% from July, according to trade sources and ship arrival data compiled by Thomson Reuters Supply Chain & Commodities Research.
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