Oil Tankers Sail to Indian West Coast From Iran Amid Gridlock Over Payment

Three crude oil tankers from Iran, OPEC’s second-biggest oil producer, sailed for India’s west coast in January while the nations discussed ways to resolve a gridlock over payments for the fuel.

The Darab, owned by National Iranian Tanker Co., was headed this week to the western Indian port of Vadinar, where state-run Indian Oil Corp., the nation’s biggest refiner, and Essar Oil Ltd. take deliveries of crude, according to ship transmissions captured by AISLIVE on Bloomberg.

The Darab, with the capacity to carry 345,000 metric tons, departed from Kharg Island, Iran’s main crude-export terminal, Bloomberg data show.

Indian refiners need to find alternative means to pay for Iranian crude after the Reserve Bank of India on Dec. 27 said companies must settle trades with the Persian Gulf state outside the Asian Clearing Union, a regional payment arrangement. This dismantled a mechanism used to complete payments for oil in euros and dollars.

Two ships, the Remi and Fair Spirit, with a combined cargo of 180,000 tons, are scheduled to reach Mangalore in western India today, according to vessel transmissions and data from Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker.

The Remi, which can transport about 105,000 tons, was chartered by state-run Mangalore Refinery & Petrochemicals Ltd. or MRPL to transport 90,000 tons from the Arabian Gulf in late December, according to data from Clarkson.

Ship Charters

MRPL, a unit of India’s biggest energy explorer Oil & Natural Gas Corp., buys about 7 million tons of crude from Iran every year, making it the South Asian nation’s biggest buyer of oil from the Persian Gulf state, Managing Director U.K. Basu said Dec. 30.

The Fair Spirit, which can carry about 100,000 tons, was chartered by MRPL to transport 90,000 tons to Mangalore from Kharg Island in early January, according to Clarkson data.

The Remi and Fair Spirit have been chartered by MRPL to also load 180,000 tons from Kharg Island and the Arabian Gulf in mid-January, the data show.

Indian Oil and state-run rival Hindustan Petroleum Corp. will get crude from Iran on credit this month, two people with direct knowledge of the matter said Jan. 4.

Crude on Credit

Iran will supply Hindustan Petroleum, India’s third-largest state refiner, with 1 million barrels on 90 days of credit, one of the people said. The refiners are exploring the possibility of paying for Iranian crude in yen, dirhams or rials, the people said.

Hindustan Petroleum rose as much as 0.9 percent to 390.90 rupees and was trading at 389.15 rupees in Mumbai at 10 a.m. local time. Indian Oil gained as much as 1.2 percent. MRPL fell 0.2 percent after climbing as much as 0.5 percent.

Oil Secretary S. Sundareshan said on Dec. 30 that India imports about 21 million tons of crude from Iran annually. The Middle East nation is India’s biggest supplier after Saudi Arabia, Oil Minister Murli Deora said in parliament April 15.

The United Nations in June stepped up punitive measures against Iran over its nuclear ambitions, applying a fourth round of sanctions. The U.S. and European Union later imposed additional restrictions. Iran says it is enriching uranium for power generation.

The U.S. has increased pressure on Iran’s banks, the country’s national security leadership and on companies that invest in Iran’s energy industry.

Iran pumped 3.7 million barrels a day in December, making it the second-largest producer in the Organization of Petroleum Exporting Countries, according to a Bloomberg survey. The other countries in the 12-member group are Algeria, Angola, Ecuador, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.