US, India Resume Talks on Cutting Iran Oil Imports

• US, India Resume Talks on Cutting Iran Oil Imports

The United States and India resumed high-stakes negotiations on Friday over the US request for India to slash its Iranian oil imports when sanctions snap back in about three weeks.

Platts Analytics expects Iranian crude and condensate exports to fall to 1.1 million barrels per day by October loadings, and to 800,000 bpd by the fourth quarter of 2019, down from 2.91 million bpd in April, according to S&P Global Platts.

Brian Hook, head of the State Department’s Iran action group, and Francis Fannon, assistant secretary for energy resources, travelled to India and later hold talks on Iran in Europe with EU counterparts and the International Energy Agency.

The India meeting comes days after the country’s oil minister said two companies had made nominations to import Iranian oil in November despite the threat of sanctions.

US Secretary of State, Mike Pompeo, said since July that the government would consider requests for sanctions relief from a “handful of countries,” but analysts continue to expect those exemptions to be few and far between.

India has been seeking relief from the US sanctions, with the highest-level talks happening in New Delhi in September between the foreign and defense ministers from both countries. At the time, Pompeo left the door open for potentially granting relief to India.

“Many countries are in a place where they – it takes a little bit of time to unwind, and we’ll work with them, I am sure, to find an outcome that makes sense,” Pompeo stated.

Current prices suggest India’s decision to continue to bring in Iranian crude makes sense, as Iranian crude grades have offered wider discounts in order to remain competitive among the few swing buyers the country still has.

In West Coast India, Iran Heavy has slipped to a $2.70 per barrel discount to US sour benchmark Mars on a delivered basis thus far in October, according to S&P Global Platts calculations, compared with $2.40 per barrel over September and a 13 cent per barrel premium in July.