RIL stops oil exports to Iran

Move To Avoid Possible Restrictions On Petro Product Sales To Bigger US Market

 INDIA'S largest private sector company Reliance Industries has stopped exporting petroleum products to Iran in order to stave off possible restrictions on sales to the far bigger US market.
    Reliance was exporting 2% of its total output, worth around $280 million, from its two refineries in Jamnagar to Iran. A top RIL official, who requested anonymity, confirmed that the gasoline exports to Iran were stopped last month. However, he refused to elaborate on this issue.
    When contacted a RIL spokesperson said: "As a policy, we do not comment on specific customers or markets."
    RIL exports petroleum products worth $14 billion annually, of which around 5% is exporting to the US.
    In April, a group of 25 senators had introduced a bill in the US Congress that aimed to punish companies that supply oil products to Iran. The proposed penalty included a ban on conducting business in the US. Apart from RIL, international oil majors, such as Shell and British Petroleum, are also facing pressure from US lawmakers. Earlier in December last year, a group of US lawmakers had asked Exim bank to suspend assistance of $900 million to RIL. This is believed to have played a major role in RIL's eventual decision to scrap the sale of petroleum products to Iran, since US Exim has funded exports of capital equipment used in oil exploration activities in the Krishna-Godavari basin, where RIL has made a number of huge gas finds. RIL's exports to Iran has been erratic since December.
    Iran has been locked in a tense standoff with the US and its major western allies over its alleged ambitions to build nuclear bombs. The UN security council has imposed a limited set of sanctions, penalising Iranian individuals and entities linked to the alleged nuclear programme. Over and above this, the US, particularly under the Bush Administration, has been pressuring financial institutions and companies to cease doing business with Iran. In the recent past, the Obama administration has sought a dialogue with Iran to cease its alleged bombmaking activities.
    US pressure on India is also widely thought to have stalled India's plans to join the much-hyped multi-billion Iran-Pakistan-India (IPI) pipeline. Last month, Iran sealed the IPI pipeline project deal with Pakistan. Analysts say that the improvement in relations between India and the US over the civil nuclear deal had made it more difficult for RIL to continue exports to Iran. "The Indian government does not support private companies in geo-political issues compared to their public sector peers, which have a (greater degree of) government backing. There is also pressure on US-based fund houses to pull out of investments in Indian energy firms, if they continue business relations with Iran," said an analyst with international brokerage firm.
    At present, the major sources of gasoline to Iran is UAE, which supplies 80% of Iran's imports. The other sources of gasoline to Iran are Turkey, Spain, France, Azerbaijan, Turkmenistan, Singapore and the Netherlands. Iran, in spite of being one of the leading oil producers, imports a substantial amount of refined products, as it does not have enough refining capacity. Iran is in process of scaling up refinery capacities, so that it may not be dependent upon imports.
AMERICAN DREAMS
RIL was exporting 2% of its total output, worth around $280 million, from its two refineries in Jamnagar to Iran
Co exports petroleum products worth $14 billion annually, of which around 5% is exported to the US
Apart from RIL, Shell and BP are also facing pressure from US lawmakers

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