India’s Reliance Industries Ltd, owner of the world’s biggest refining complex, plans to halt oil imports from Iran, two sources familiar with the matter said, in a sign that new U.S. sanctions are forcing buyers to shun oil purchases from Tehran.
Reliance’s move, expected to take effect in October or November, came after U.S. President Donald Trump abandoned a 2015 nuclear agreement this month and ordered the reimposition of U.S. sanctions on Tehran.
Some sanctions take effect after a 90-day “wind-down” period ending on Aug. 6, and the rest, notably on the petroleum sector, after a 180-day “wind-down period” ending on Nov. 4.
India has said it does not follow U.S. sanctions but companies with links to the U.S. financial system could be liable to penalties if they do not comply.
Reliance, an Indian conglomerate controlled by billionaire Mukesh Ambani, has significant exposure to the financial system of the United States, where it operates some subsidiaries that are linked to its oil and telecom businesses among others.
Reliance, whose modern refining complex at Jamnagar in Gujarat can process about 1.4 million barrels per day (bpd) of crude, has told officials of the National Iranian Oil Co (NIOC) that the firm would stop oil imports from Tehran in October or November, one of the sources said.
A second source said the company could halt imports from Iran earlier than that if European nations and Tehran failed to salvage the nuclear deal.
This source said that some insurance companies have asked Reliance to end exposure to Iran before November.
Global insurers have already warned about doing business with Iran while some shipping lines have said they would not take new bookings for Iran.
The United States has threatened to impose sanctions on European companies that do business with Iran.
In the interim period until it stops buying Iranian oil, Reliance has asked NIOC to supply Iranian oil in vessels owned by National Iranian Tanker Company (NITC), the sources said.
The sources did not wish to be identified as the matter is sensitive. Reliance did not respond to an email from Reuters seeking comment.
In 2017, Reliance’s oil imports from Iran surged by about 45 percent to 67,000 bpd, according to ship tracking data. In Jan-April 2018, the company has imported about 96,000 bpd.