India’s Essar Oil Ltd, the country’s largest refiner, expects to lower crude purchases from Iran after shipments from OAO Rosneft begin once the Russian state producer completes a deal to buy a 49% stake in the Indian company, Bloomberg reported. According to Oil Price, the 10-year agreement stipulates that Rosneft will supply 10mt/y of crude to the Vadinar refinery. The deal was nearing completion in July, with the closing date set for October.
Essar company does not plan to import any crude under the agreement in 2016. It has not decided which country or project Rosneft will source the crude from.
Essar is Iran’s biggest oil buyer in India. Therefore, the deal with Rosneft will significantly impact Iran’s oil export projections.
Essar bought an excess of 148,000 b/d from Iran in the first six months of 2016, accounting for more than 40% of the country’s purchases from the Persian Gulf nation. The company gets about 30% of the crude it needs for its 20mt/y refinery from Iran.