In a recent statement, the Indian government said “King Abdullah offered all assistance, including additional supply of crude oil, and is the only oil producer with significant spare capacity to replace any fall in supply from its regional rival Iran.”
India’s recent oil sales with Iran have been highly problematic for the past year, as sanctions have rendered payment mechanisms unusable; this has led Indian refiners to seek alternative supplies.
Saudi Oil minister, Ali Naimi claimed that daily production could be increased by 2 million bbls with no delay.
Despite India’s defiance of the sanctions imposed on Iran, attempts to continue trading with Iran may be undermined as exporters decide to avoid dealing with the embargoed nation.
In a sign of gradually changing attitudes, Hindustan Petroleum Corp. has reduced proposed imports of Iranian oil from 70 000 bpd to 60 000 bpd whilst doubling the amount it imported from Saudi Arabia. This is trend appears to be spreading as other refineries are also increasing their imports from Saudi Arabia.