TEHRAN – Indian refineries are getting worried about the risks that U.S. sanctions on Iran could impose on their profitability, Economic Times reported citing Mangalore Refinery and Petrochemicals Ltd (MRPL).

"The recent developments surrounding Iran and imminent U.S. sanctions and pressure on India to reduce imports from Iran point towards a significant short-term supply risk to the company," MRPL stated in its FY2017-18 annual report.

Of the 15.98 million tons of crude oil MRPL bought during fiscal year ended on March 31, 2018, 12.52 million tons came via imports. Iran supplied the largest volume of 4.72 million tons, followed by Saudi Arabia at 4.35 million tons.

"The sanction on Iran, which is an important supplier of crude to the company, is also an immediate threat to profitability. The reduction in supplies of crude from Iran, following sanctions will have an impact on crude prices globally and will affect the company in the short term," the refiner said.

Earlier this month, Iran offered Indian refiners incentives including low-price shipping and an enhanced credit period on oil sales.

Iranian embassy in New Delhi published a statement on July 13 assuring Indian refiners on taking necessary measures for secured oil supplies to India, offering “flexible measures” to boost bilateral trade.

India was one of the few countries that continued to deal with Iran during previous sanctions.

EF/MA