Indian refiner Reliance Industries has resumed fuel supplies to Iran from July after halting it in the last quarter of 2007 over credit issues, four trade sources familiar with the deal said. However Financing arrangement for the sale is not yet clear.
Reliance quit selling fuel to Iran last year after French banks BNP Paribas and Calyon stopped offering credit on the deals, succumbing to pressure from Western nations that believe Tehran is trying to develop nuclear weapons. The new deal is sealed ahead of Reliance's upcoming 580,000 barrels per day (bpd) refinery, which along with the company's existing plant will make Jamnagar in western Gujarat state the world's biggest oil complex processing about 1.24 million bpd.
On April 30, a top Reliance official told Reuters the firm was in talks to resume product supplies to Iran as it imports crude oil from the Middle Eastern country, but he had ruled out a processing deal saying: "No. There are other ways also."
Traders say there is a possibility that Reliance's recent tender to sell combi-cargoes of 90 RON and 95 RON gasoline was awarded to the National Iranian Oil Company (NIOC). Reuters on July 16 reported the award of the July-December stem to an oil major.
"Reliance has sold two cargoes of 35,000 tonnes to Iran in July. What we know is that the deal with Iran as of now is till December to sell two to three cargoes a month," said an India-based trader.
A Singapore-based trader also confirmed the timing and size of the deal. He said the prices were linked to Middle East spot quotes for naphtha and the deal was in exchange for crude purchased by Reliance from the Islamic Republic. Trade sources said until last financial year ending April Reliance was seen buying around five to six million tonnes of Iranian crude mainly Souroush and Nowruz.
But the quantities might have gone up now as the refiner seeks to lock supplies for its new unit. Another India-based trader confirmed the sale of combi-cargo to Iran by Reliance in July. A Middle East-based trader said: "They are moving one cargo for discharge in Iran this weekend. He, however, said the deal was from July to March, 2009.