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Can India start importing oil from Iran again?

Wednesday - September 18, 2019 9:59 am , Category : WTN SPECIAL
Oil prices increase rapidly
Oil prices increase rapidly

India's concern increased after Saudi oil plant crisis

SEP 18 (WTN) - The oil supply to the entire world has been suffered due to drone attack on two plants of the world's largest oil company Aramco in Saudi Arabia. Crude oil prices have increased by nearly 20 per cent since the attack. This increase in crude oil prices is the first time since the 1991 Gulf War. But the whole world is worried that if the oil supply from Saudi Arabia is not restored within time, the entire world oil supply will be severely disrupted. In such a situation, the concern of countries like India has increased a lot.
 
For your information, let us know that after the attack on two Saudi Arabian oil plants, half of the total production of Saudi Arabia has been affected, while production of five per cent of the global supply has been interrupted. Not only this; the additional production capacity of 2 million barrels per day, that Saudi Arabia has created for the emergency, will not be able to be used for any reason. Let us know that Saudi Arabia is the only country which has so much additional capacity for Emergency.
 
According to the information from the International Energy Agency (IEA), OPEC (Organization of Petroleum Exporting Countries) had a total global supply of 3.21 million barrels per day (mbpd) before this attack. Of this, Saudi Arabia alone supplied 2.27 mbpd.
 
Oil production is getting reduced day by day. OPEC and Russia are already reducing the production to prevent further decline in prices. This is being done, because there was an oversupply of oil in the market some time ago. The reduction was aimed at reducing the supply to 1.2 mbpd, most of which has been reduced from Saudi Arabia. But now that decision in Emergency can’t be overturned immediately. Non-OPEC countries like Russia can also produce only 1 to 1.5 lakh bpd.
 
It is not that oil shortages can’t be met after attacks on Saudi Arabian oil plants. For your information, let us know that Iran has additional capacity to supply oil, but it has been banned by the US, due to which its oil can’t be used by the rest of the world. Iran's oil exports have dropped by 20 mbpd since the US embargo.
 
Here, the US has banned the oil industry of the South American country Venezuela. According to the information, Venezuela production has dropped significantly over the years. Even if the US lifts the ban, the state-owned PDVSA is not able to increase production.
 
By the way; for your information, let us know that in the last few years, America has become the largest producer of crude oil in the world and it has now surpassed even Saudi Arabia. The US has exported more crude oil than Saudi Arabia in the month of June. After Saudi Arabia's oil crisis, the US shale producers may try to increase production faster if oil prices rise, but it will also take several months.
 
The whole world hopes that the damaged oil plants of Saudi Arabia will be recovered as soon as possible, so that the global oil supply can be restored as soon as possible. But the big question among all is that if there is a problem in getting the oil supply restored as soon as possible, can India resume import of crude oil from Iran bypassing US sanctions?

We are saying this, because after the US embargo, India has not been able to import oil from Iran. Iran is also ready to export oil in Indian rupees. In such a situation, can the Modi Government again start importing oil from Iran to give relief to the general public after the huge increase in the prices of crude oil?
 
If the Modi Government does this in an Emergency, then this will stop the huge increase in oil prices in India. But if India does this, then it is natural that it will annoy America. But the situation says that if the price of oil rises wildly, the Indian Government can import oil from Iran, bypassing the US sanctions to support the already slowing Indian economy.