Reuters reported that India's biggest buyer of Iranian oil Mangalore Refinery & Petrochemicals Limited has bought Azeri, Saudi and Emirati crude to replace imports from Iran in July 2012 and it may halt purchases from Tehran altogether as sanctions make shipments more difficult.

Loss of exports to MRPL would be a blow to Iran, which has seen overseas sales decline by more than half from a year ago due to US and European Union sanctions. The sanctions against Iran's nuclear program, which the West thinks is aimed at making weapons, are meant to cut the country's oil revenues.

One of the sources said that "MRPL has initiated steps to halt its imports from Iran. It is facing problems on a daily basis. Government pressure, sanctions and the latest is Iran's threat to shut the Strait of Hormuz."

The source declined to detail the steps MRPL was taking. The refiner has been forced to restrict its lifting from Iran to a fifth of the planned 3.3 million barrels per day in July 2012.

Iran over the weekend renewed its threat to close the Strait of Hormuz unless sanctions against it were revoked. Flows through the Strait last year accounted for about 35% of all sea borne traded oil or almost 20% of oil traded worldwide.
MRPL has signed a two month deal with Azerbaijan after shipments from Tehran were hit in July 2012, besides buying an additional cargo each from its existing suppliers UAE and Saudi Arabia, to offset Iranian supply cuts.

The Indian refiner has an annual deal to lift 40,000 barrels per day from the UAE and 49,000 barrels per day from Saudi Aramco.

Source - Reuters

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