Crude oil from Iran costs India $2 less per barrel than global prices, oil minister said on Friday, outlining the reasons for the country's desire to source oil from sanctions-hit Tehran.
"Our refiners enjoy much better margins. The cost is $2 less . . . that's why we are seriously engaging with Iran," M Veerappa Moily said.
Brent crude was trading at $105 a barrel on Friday while US oil was at $96.75.
Iran oilfields could spring back from Western sanctions: According to another report by Peg Mackey in London, Iran's oilfields will be able to bounce back within months from drastic production cuts if Western sanctions are lifted although a full recovery would take over a year and require hefty investment, oil industry experts say.
Once ranked No 2 in OPEC behind Saudi Arabia, Iran's production has plunged by 1 million barrels per day to 2.6
million bpd as harsh measures imposed early last year by the United States and Europe make it ever harder for Tehran to sell crude and fund its vital oil sector.
Iran votes for a new president to succeed Mahmoud Ahmadinejad on Friday, but the victor will see no immediate relief from the sanctions against Iran's nuclear programme.
Tehran says the programme is for peaceful, domestic purposes.
Washington is now seeking to squeeze Iran's exports below 500,000 bpd -- a quarter of the rate before the tighter sanctions -- which would reduce production to levels last seen 30 years ago when Iran was at war with Iraq.
Shutting down such large volumes of oil is choking off billions of dollars in revenue, but it is also reviving Iran's fields by allowing pressure to rise.
In this condition -- when the day comes for sanctions to be lifted -- the fields could ramp up to 3 million bpd within months and reach to 3.6 million about a year later, experts say.
Crude oil from Iran costs India $2 less per barrel than global prices, oil minister said on Friday, outlining the reasons for the country's desire to source oil from sanctions-hit Tehran.