Indian Oil Corp (IOC), the nation’s biggest oil firm, has tied up imports from the US and taken additional volumes from Saudi Arabia to make up for the volumes lost because of sanctions prohibiting buying oil from Iran. Iran supplied more than a tenth of India’s oil needs before the reimposition of US sanctions against Tehran stopped supplies this month.

“We have tied up supplies from alternate sources. No single country can make up for the volumes lost, that’s why we are keeping our sourcing diversified. We are fairly diversified in our sourcing and we have robust sourcing in place to make up for all of the Iranian oil,” said IOC chairman Sanjiv Singh.

India bought close to 24 million tonnes of crude oil from Iran in 2018-19. Of this, IOC sourced about 9 million tonnes from Iran.

IOC and other Indian refiners stopped importing oil from Iran this month following the US’ move to end sanction waivers.

To make up for the shortfall, IOC has used optional volumes available from suppliers such as Saudi Arabia. Also, it has for the first time signed term import contracts with two US suppliers. In all, 4.6 million tonnes of crude oil from the US has been signed up for 2019.

IOC director (finance) A K Sharma said the company has an annual contract to buy 5.6 million tonnes of crude oil from Saudi Arabia. On top of this, it has the option to import an additional 2 million tonnes.

From the US, IOC has signed a deal with Norwegian oil company Equinor for buying 3 million tonnes of crude during the year and an additional 1.6 million tonnes from Algerian national oil company Sonatrach. Equinor and Sonatrach produce crude oil in the US.

Singh said refiners import crude oil from a wide range of sources and have been lining up alternative supplies for the past months.

Last year, US President Donald Trump withdrew from the 2015 nuclear deal between Iran and world powers and revived a range of sanctions. However, he granted a six-month waiver to China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece, but with a condition that they would reduce their purchases of Iranian oil. The waiver began in November 2018 and expired on May 2.

India had agreed to restrict its monthly purchase to 1.25 million tonnes to get the waiver. But since it had made robust purchases in the period prior to November, India’s overall crude oil imports from Iran totalled nearly 24 million tonnes in 2018-19 as compared to 22.6 million tonnes in 2017-18.

IOC has the option to take 0.7 million tonnes of crude oil from Mexico on top of its committed purchase of 0.7 million tonnes during the year. Similarly, it has optional volumes of 1.5 million tonnes from Kuwait and another 1 million tonnes from the UAE.

India, the world’s third-biggest oil consumer, meets more than 80 per cent of its needs through imports. Iran was its third-largest supplier after Iraq and Saudi Arabia and was meeting more than 10 per cent of its needs.

Iranian oil is a lucrative buy for refiners as it provides 60 days of credit for purchases, terms not available from suppliers of substitute oil.