In another sign of Tehran’s improving trade and economic ties with regional countries, Iran has overtaken OPEC-member rivals Saudi Arabia and Iraq as India’s top oil supplier.
Iran’s market share in energy-hungry India had declined as international sanctions had deterred governments and international companies from doing business with Iran. But the removal of most nuclear-related sanctions in January has allowed India to import more oil from Iran this year. Iran’s oil supply to India in October, according to Iran’s Tasnim News Agency, increased almost threefold compared with the previous month. Saudi Arabia and Iraq remained the second and third oil suppliers to India respectively.
A protracted disagreement between OPEC members over production cuts, coupled with a decrease in Saudi oil output, appears to have benefited Iran. To compete with rivals, Iran has also offered lucrative incentives and discounts to India. Moreover, New Delhi maintained trade and economic ties with Tehran when international sanctions regime was in place and Indian refineries are tailored to process Iranian-grade crude.
Efforts by India and Iran to expand relations are not confined to oil, however. In the past one year, the two countries have significantly boosted their commercial ties in areas such as banking, transportation and technology. Earlier this year, New Delhi also committed about $500 million to develop Iran’s Chabahar port to gain access to the Middle East and Central Asia and compete with Pakistan-China’s Gwadar port.