India will buy nine million barrels of Iranian crude oil in November, two industry sources said, indicating that the world’s third-biggest oil importer is to continue purchasing crude from the Islamic Republic despite US sanctions coming into force on November 4.
“Refiners have placed November nominations to lift 1.25 million tonnes (about nine million barrels) of crude oil from Iran,” one of the sources said.
Indian Oil Corp will lift six million barrels of Iranian crude oil and Mangalore Refinery and Petrochemicals Ltd to lift three million barrels, the source told Reuters.
The United States plans to impose new sanctions targeting Iran’s crude oil sector on November 4 to try to stop the country’s involvement in conflicts with Syria and Iraq and bring Tehran to the negotiating table over its ballistic missile programme.
The sources declined to be identified as they were not authorised to speak to the media. Indian Oil and Mangalore Refinery did not immediately respond to a request for comment.
“India is continuing with its relationship with both its key energy partners Iran and the US,” a second source said.
Indian refiners imported around 10 million barrels of Iranian crude oil in October, and its November shipments are expected to be lower.
In the previous round of sanctions, India continued to buy Iranian crude oil although it had to cut purchases significantly to protect its wider exposure to the US financial system.
India’s foreign minister said in May it abides only by sanctions imposed by the United Nations and not those imposed by any other country.
With the European Union considering the creation of a “special purpose vehicle” before November to facilitate trade with Iran, India hopes to find a way to settle payments to Tehran.
“Previously there was no European channel. This time Europe is not working with the US, so we intend to evolve a mechanism,” the second source said.
India, Iran’s top client after China, has close diplomatic ties with Iran, where it is building a strategic port called Chabahar that is expected to be operational by 2019. At the same time, India is closely working with the United States to further its strategic interests.
“It is still early to say how India will settle its trade with Iran,” the first source said, adding that India could consider paying Iran for crude with the rupee currency.