India’s oil imports from KSA rise by 32% after Iran curbs

India is now importing the bulk of its oil requirements from India. (SPA file photo)
Updated 28 June 2019

India’s oil imports from KSA rise by 32% after Iran curbs

  • Saudi Arabia has become the second-largest crude supplier to India
  • KSA has become the second-largest crude supplier to India

NEW DELHI: India’s oil imports from Saudi Arabia have jumped by 32 percent after US sanctions against Iran came into effect, making Riyadh the second-largest crude supplier to the South Asian republic.

According to data released by the Directorate General of Commercial Intelligence and Statistics (DGCI&S), a Kolkata-based organization associated with the Indian Ministry of Commerce, the dwindling supply of crude oil from Iran has seen an increase in imports from Iraq, Saudi Arabia, the US and Nigeria.

Imports from Saudi Arabia reached 3.55 million tons (MT) in May this year compared to 2.68 last year, the report said. At the same time, crude supply from Iran went down to 0.56 MT from 3.13MT. Iran was the third-largest importer of oil to India.

“Imports from other Middle Eastern countries have increased by 30-40 percent after we replaced crude from Iran. Middle Eastern countries present logistic advantage, that’s why their choice was logical,” said R. Ramachandran, director (refineries) of Bharat Petroleum Corporation Limited (BPCL), a leading oil company owned by the Indian government.

“I cannot tell you the exact percentage but we have replaced Iranian crude with Saudi (crude) and some other countries,” Ramachandran told Arab News.

New Delhi was compelled to cut off imports from Iran after the Trump administration imposed sanctions on Iranian oil exports.

India was one of eight countries given a waiver from the US to import oil from Iran, but the waiver expired on May 2.

The issue of the ban on Iranian imports has been one of the sour points in the relationship between India and the US.

Secretary of State Mike Pompeo tried to address the issue by assuring New Delhi of adequate oil supply from the US during his visit to India on Wednesday.

“We’re doing everything we can to ensure that you have adequate crude imports. We appreciate your help in pushing these regimes to behave like normal countries,” Pompeo said in a speech in New Delhi on Wednesday evening.

“You’ve made hard choices to cut off oil imports from Iran, and move away from purchasing Venezuelan oil. We know these decisions weren’t without cost,” he said.

Indian Foreign Minister Subrahmanyam Jaishankar told reporters after the interaction with his US counterpart: “I underlined the importance of stability, predictability and affordability in terms of India’s energy imports.”

He also said that the US is “very receptive” to India’s concerns about its global energy supplies.

BPCL chief Ramachandran said: “We have more opportunities available to import oil from the US, which is working out to be more economical than we expected.”

News reports quoting a spokesperson from the Indian petroleum ministry said that New Delhi had stopped importing oil from Iran.

Madhu Nainan, an editor of Petrowatch, a leading news portal on the Indian oil industry, said: “India has found alternative sources of crude supply, most importantly the USA and some of the Middle Eastern countries — a prominent one being Saudi Arabia.”

“Saudi Arabia being in a neighboring region means it is able to supplant oil from Iran. Besides, the growing bonhomie between the two nations also adds value to the relationship,” Nainan told Arab News.

Saudi Aramco shares soar at maximum 10% on market debut

Updated 10 min 7 sec ago

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple
  • More than top five oil companies combined

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco had earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: