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India to build strategic petroleum reserves under Rs 1,150 crore plan

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By NewsGram Staff Writer

To secure India’s energy economy against supply and price fluctuations globally, an additional funding of over Rs.1,150 crore is being provided to Indian Strategic Petroleum Reserves Ltd. (ISPRL).

Through supplementary demands for grant presented to parliament earlier this week, union Finance Minister Arun Jaitley sought an allocation of Rs.1,153 crore for buying crude oil to fill the first strategic crude oil reserve being built at Visakhapatnam by ISPRL.

India plans for a strategic reserve that could hold up to 1.3 million tonnes of crude oil.

Under this plan, the government would set up a Strategic Crude Oil Storage of about 5.33 million tonnes at two other locations in the country — Mangalore (1.5 million tonnes) and Padur (2.5 million tonnes) in the first phase.

The Mangalore and Padur projects, both on the western coast of Karnataka, are nearly complete, awaiting pipeline connections from the nearest ports.

A second phase is also under planning, which seeks to create 12.5 million tonnes storage capacity at Padur, Chandikhol (Odisha), Bikaner (Rajasthan), and Rajkot (Gujarat).

While India currently imports about 80 percent of its oil requirements, the International Energy Agency predicts that by 2020, India could become the world’s largest oil importer.

The current slump in oil prices that have been in steady fall since the later half of last year is considered an opportune time to build up strategic oil reserves.

The India basket of crude oil fell this week to levels around $52 for a barrel of nearly 160 litres.

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Iranian Economy Gets A Harder Hit by U.S., Trade Figures Shrink With Europe’s Biggest Economy

In other setbacks to Iran, its trade with Germany, Europe’s largest economy, slumped in the first two months of this year, according to the Association of German Chambers of Commerce and Industry.

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An employee walks past oil tanks at a Sinopec refinery in Wuhan, Hubei province April 25, 2012. China’s top state-owned refiners have decided not to order any oil for loading at Iranian ports this month, according to Reuters. Pixabay

U.S. sanctions are biting harder into the Iranian economy, with new signs that Iran’s key oil exports are faltering, while its trade figures with Europe’s biggest economy and with the United States are shrinking.

U.S. news service Bloomberg said it has compiled tanker tracking data showing that no oil tankers had been seen leaving Iran’s oil terminals for foreign ports in the first nine days of May. Crude oil is Iran’s main revenue source.

Washington tightened its unilateral sanctions on Iranian oil exports May 2, ending waivers that it granted to several countries to keep importing crude from Iran and requiring them to reduce imports to zero. The U.S. sanctions are aimed at pressuring Iran to change its perceived malign behaviors.

Bloomberg said the tracking data also revealed that four Iranian tankers were anchored off the coast of China as of May 9, with a fifth tanker on its way to the Chinese coast. It said most of the rest of Iran’s tanker fleet either was returning to the Persian Gulf after discharging cargoes or had been observed in or near the region in the previous two days. It said 10 Iranian tankers had not sent tracking signals for at least 16 days, keeping their transponders turned off in an apparent effort to hide their movements.

In a report published Friday, Reuters said the four Iranian tankers off the Chinese coast and the fifth on its way to China had loaded Iranian crude in April, before China’s U.S. waiver to import the oil expired. It said two of the tankers have discharged their oil to Chinese clients, while two others were waiting to do so at the Chinese ports of Ningbo and Zhoushan.

But in a further blow to Iran’s oil industry, Reuters quoted “three people with knowledge of the matter” as saying China’s top state-owned refiners China Petrochemical Corp (Sinopec) and China National Petroleum Corp (CNPC) have decided not to order any oil for loading at Iranian ports this month. Reuters cited the sources as saying the Chinese refiners were worried that making such orders would expose them to U.S. sanctions that could block their access to the U.S. financial system.

Iran has vowed to keep exporting oil in defiance of U.S. sanctions.

Syria
There was no immediate reaction by the Trump administration to the undeclared Iranian oil delivery to Syria. Pixabay

In recent days, Western media said it appears that Tehran did find one oil customer this month, with an Iranian tanker delivering crude to Syria for the first time this year. Iran had stopped oil shipments to Syria, a key regional ally, late last year after suspending a credit line to Damascus because of impending U.S. sanctions against Tehran. The halt in Iranian oil deliveries to Syria, which also is under U.S. sanctions, led to fuel shortages during the Syrian winter.

Reuters cited a source familiar with Iranian oil shipments as saying the Iranian tanker arrived in Syria last week. U.S. network CNBC quoted firms that track maritime shipments as saying Iran made the delivery in the first week of May.

In a tweet posted Friday, TankerTrackers.com co-founder Samir Madani said the Iranian oil arrived May 5 aboard a Suezmax tanker previously known as True Ocean. Suezmax is a naval term for the largest ship capable of transiting the Suez Canal.

There was no immediate reaction by the Trump administration to the undeclared Iranian oil delivery to Syria.

In other setbacks to Iran, its trade with Germany, Europe’s largest economy, slumped in the first two months of this year, according to the Association of German Chambers of Commerce and Industry.

In Friday reports, newspapers belonging to Germany’s Funke Media Group cited the association as saying German exports to Iran fell 52.6% year-on-year to $261 million in January and February, while German imports from Iran dropped 42.2% to $46 million in the same period.

The Funke newspapers quoted the head of the German-Iranian chamber of commerce, Dagmar von Bohnstein, as saying: “The market in Iran is extremely difficult because of the U.S. sanctions and the country’s economic conditions.” Iran has seen more than a year of small-scale nationwide protests by workers angry at what they see as corruption and mismanagement by its ruling Islamist clerics.

The U.S. Census Bureau also posted trade data Thursday, showing U.S. exports to Iran fell 54.7% in the first quarter of 2019 versus the same period last year, to $14.6 million. It said U.S. first-quarter imports from Iran dropped to just half-a-million dollars, compared to $13.3 million in the year-earlier period.

U.S. Special Representative for Iran Brian Hook speaks to VOA Persian at the State Department in Washington, May 9, 2019.
U.S. Special Representative for Iran Brian Hook speaks to VOA Persian at the State Department in Washington, May 9, 2019. VOA

In a Thursday interview with VOA Persian at the State Department, U.S. Special Representative for Iran Brian Hook said Iran’s economic troubles will get worse.

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“That is the price this regime is going to pay for behaving like an outlaw regime,” Hook said. “We are denying Iran the ability to fund its proxies. So we are very happy with this steady state of pressure that we hope to keep in place for as long as is necessary.” (VOA)