Reliance Industries will not renew a contract to import crude oil from Iran for financial year 2010, two sources familiar with the supply deal said on Thursday.
India’s top privately run refiner did not purchase any Iranian crude in February and March, the sources said, in line with a trend that has seen its purchases from the Islamic republic shrink rapidly over the past year.
It is not immediately clear why Reliance is not renewing its annual import deal with the world’s fifth-largest oil exporter, but sources said it could be due to a price disagreement when the refiner has easy access to competing grades.
“Currently for 2010 as of now, we don’t have a term contract with Reliance,” said a National Iranian Oil Co (NIOC) source who declined to be named on company policy.
“It has nothing to do with the U.S.,” he said, adding that the deal has not been renewed due to differences over pricing of Soroush and Nowruz crudes.
While the 90,000-100,000 barrels per day (bpd) of Iranian crude Reliance bought last year made up only 8 percent of its overall purchases, and just 2.4 percent of Iran’s sales, the move underscores a drift in Asia away from crude sourced from Iran.
Japan’s Iranian crude imports in 2010 are set to fall 11 percent on year to the lowest in 17 years, sources say, also citing high prices for Iranian grades, while China’s purchases from Iran fell nearly 40 percent in the first two months of the year.