Indian Times reported that Essar Oil, one of the key Indian clients of Iran, imported about 30% more oil from the nation in October compared with September and made rare purchases of Oriente grade from Ecuador.
Essar has renewed its term deal with Iran to buy 100,000 barrels per day in the financial year ending March 31st 2013 but company sources said the refiner plans to cut purchases by 15% after a verbal directive from the government. However, the refiner has shipped in an average 108,900 barrels per day in the April to October period.
Essar's plant was shut for an upgrade in October 2011 and so it only bought oil from Iran under its term deal. The private refiner has significantly raised processing of heavy and ultra heavy grades, including those from Latin America to improve refining margins. Import of Iranian oil was also high in October as the refiner took delivery of a very large crude carrier, the Suneast, which loaded in September.
The company began replacing Latin American crudes with locally produced Mangala oil in 2010 but has now turned back to the region to feed its expanded capacity. It has an annual deal with Colombia's Ecopetrol to import 12 million barrels of Castilla crude oil.
Essar aims to buy 15% to 20% of its crude oil needs from the domestic market, 35% to 40% from Latin American sources and 30% 40% from the Middle East. The refiner imported about 143,000 barrels per day of oil in four Iranian tankers in addition to the Suneast they were the Clove, Christina and Crystal becoming the biggest Indian buyer from Iran in October.
Essar got nearly 42% of its crude imports from Iran in the first 10 months of the calendar year. Overall imports by Essar rose about 46% during January to October to about 30,000 barrels per day.
