Mangalore Refinery Cuts Crude Imports From Iran

WSJ

NEW DELHI--Mangalore Refinery & Petrochemicals Ltd. 500109.BY +2.24% said Thursday the company has lowered its target for importing crude oil from Iran as Western sanctions against Tehran have made it difficult for the Indian refiner to contract tankers.

The company said it plans to import 3.8 million metric tons, or about 74,000 barrels a day, of crude from Iran this financial year through March against its previous target of 5.0 million tons.

The Oil & Natural Gas Corp. 500312.BY +0.35% unit is India's largest importer of crude from Iran. It bought 6.2 million tons of crude from the Middle Eastern country last fiscal year.

Its imports have fallen after the U.S. and the European Union imposed financial and trade sanctions on Iran to prevent the country from developing nuclear weapons. Tehran says its nuclear program is for peaceful purpose.

The U.S. later exempted countries such as India and China from penalties targeting financial institutions that do business with Tehran as they have reduced their oil imports from Iran. However, MRPL and other Indian refiners are still hit as European insurers stopped providing cover for Iranian oil cargo.

"Even importing this [3.8 million tons] looks difficult," said MRPL Managing Director P.P. Upadhya when asked whether imports in the next financial year will be more than this year.

The Mangalore, South India-based refiner plans to source more crude from Azerbaijan to offset the fall in imports from Iran. It also buys crude from countries including Saudi Arabia, Kuwait and Iraq.