Iran's oil exports to slide in May, but not to zero

It was not immediately clear if some of the five could be given additional time to find their buys or when they'd be subject to US sanctions on May 3 if they do not immediately stop imports of Iranian oil.

"Iran likes India", he pointed out, highlighting the close trade and diplomatic relationship between the two countries on crude oil imports being based on rupee transactions and India's investment in that country.

Earlier in 2012, sanctions imposed on Tehran by the Obama administration had forced India to reduce its Iranian oil imports by half.

Oil prices were on track for sharp weekly declines on Friday as robust US output countered production losses in sanctions-hit Iran and Venezuela.

Separately, Zanganeh said Iran's gas output will cross 1,000 million cubic metres (mcm) this calendar year, the oil ministry reported on its Twitter account.

Almost one-tenth of India's overall crude import comes from Iran. Qatar announced its exit in December after more than five decades of membership, after its neighbour Saudi Arabia targeted the nation with an economic blockade.

OPEC and other oil-producing countries, including Russian Federation, will meet June 25-26 in Vienna, Italy to decide what to do to limit oil supply. There's been no reaction from the USA government to these pleas and all eyes will be on tanker traffic to other customers. But Jeff Schott, a senior fellow at the Peterson Institute of International Economics, says the Saudi crude might not be suitable in China, India and elsewhere.

Any surge in inflation sparked by the end of the sanctions waivers would make it hard for the Reserve Bank of India to cut again at its next meeting in June. "We do not recognise any country-specific sanctions", Swaraj said.

Saudi Arabia has traditionally been India's top oil source, but it was for the first time dethroned by Iraq in 2017-18 fiscal year.

The market expects OPEC to extend its production-cut deal till this year-end. "The U.S. oil market might just be providing the producer group with the flawless excuse to extend the production agreement for at least another six months", PVM's Tamas Varga said. As a result, crude-oil prices have been rising sharply.

Due to the sanctions, it is hard for most regular shipowners to carry Iranian crude or to load in Iran. This coupled with the USA sanctions against Venezuela will put pressure on OPEC to fill the gap.

Azour said that the projection preceded the latest elimination of waivers, meaning the situation for the Iranian economy could get even worse.

"In other words, oil traders have spent much more time during the past decade anxious about downside risks than prices heading higher", Norland added.

Iran owns 37 VLCCs, of which 10 are now used for storage, nine Suezmaxes and six Aframaxes.

  • Zachary Reyes