Bharat Petroleum May Resume Iranian Oil Buying If No Sanctions, Needs Concessions

State-run Bharat Petroleum Corp could annually take up to 2 million tonnes of Iranian oil if the OPEC member offers concessions to make its crude oil attractive compared to rival grades, a company official said on Thursday. BPCL was annually taking 2 million tonne of Iranian crude oil on average when Tehran was not under U.S. sanctions.

"We have been taking 2 million tonnes (per year) of Iranian crude oil, on an average, when things were normal. We will go back to that number ... I won't be taking 6 million tonnes of Iranian oil ", said N. Vijayagopal, BPCL's head of finance.

Vijayagopal, however, said purchases of Iranian oil depends its pricing compared to the similar rival grades. Iran was offering discounts on crude and shipping on oil sales to Indian refiners.

India, the world's third largest oil consumer and importer, halted oil imports from Tehran in 2019 as a temporary waiver granted to some countries expired. Former U.S. President Donald Trump abandoned the 2015 Iran nuclear deal in 2018 and reimposed sanctions.

U.S. President Joe Biden's administration and Iran have engaged in indirect talks to revive the pact for Tehran to curb its nuclear activities in exchange for a lifting of sanctions. Iranian government spokesman Ali Rabiei said on Tuesday he was optimistic over Tehran reaching an agreement soon at talks with world powers to revive a 2015 nuclear deal.

Indian refiners are planning to replace some of their spot purchases with Iranian oil in second half of this year as the U.S. and Iran inch closer to a deal.

He said the company meet about 45 per cent of it oil import needs through spot and the remainder through long-term contracts. Vijaygopal also said that his company is operating its refineries at an average 86 per cent capacity as a second wave of COVID-19 has curtailed local fuel demand.