India Plans to Cut Iran Oil Imports by 20%

Mangalore Refinery and Petrochemicals Ltd. (MRPL) has plans to cut its annual import deal with Iran by 44 percent, according to the latest report.

Going by the report in Reuters, MRPL, Iran’s biggest Indian oil client, will cut the import to 80,000 barrels per day leading to over 20 percent reduction in the total oil purchases from Iran.

This follows earlier announcement by European Union governments to halt oil purchases from Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia. The European Union buys about 18 percent of Iran's total crude exports. According to the European Union data, Italy and Spain each get about 13 percent and Greece receives 33 percent of their oil from Iran. The UK and Germany get only about 1 percent of their oil from Iran, while France gets only about 3 percent from there.

The U.S. and other Western nations have alleged that Iran is in the process of building a nuclear weapon, a claim denied by Tehran.

The U.S. and Europe have tightened economic sanctions against Iran. Iran has repeatedly argued such sanctions will not cripple the country's economy nor disrupt its nuclear program. In response, Iran has threatened to withhold oil deliveries and block the Strait of Hormuz, through which a fifth of the world's oil flows.

Iran's top oil buyers in Europe have made substantial cuts in supply months in advance of European Union sanctions. France's Total has already stopped buying the crude, which is subject to European Union sanctions from July 1 and market sources say Royal Dutch Shell has scaled back sharply.

China and Japan have also agreed to reduction of oil import from Iran. Those that have reduced Iranian imports are filling the void with a range of replacement barrels from top exporter Saudi Arabia, Iraq and Russia.