India Will Benefit From Sliding Oil Prices Post-Iran Nuclear Deal: Petroleum Minister Dharmendra Pradhan

New Delhi:  International oil prices will come down with the imminent lifting of sanctions against Iran and benefit India, Petroleum Minister Dharmendra Pradhan said today.

“With Iran coming to market, the assumption is that there will be further slide in oil prices… India will be one of the beneficiaries of sliding oil prices,” he said.

India is the world’s fourth largest oil consumer and also the second biggest buyer of Iranian oil after China, importing about 11 million tonnes of crude oil in 2014-15.     

However, Mr Pradhan remained non-commital on whether India will increase imports from Iran after restricting it at 11 million tonnes in the past two fiscal.

“Let’s see. It (increasing imports) depends on a lot of commercial considerations,” he said. “But one thing is sure, oil prices (in international market) will be reasonable. I believe prices will be reasonable and responsible.”

The slide in oil prices may, however, put some pressure on exploration and production (E&P) business due to low returns, he said here at an industry event while adding this was “a challenge.”

As per the deal, sanctions imposed by the US, European Union and United Nations will be lifted in return for Iran agreeing long-term curbs on a nuclear program that the West suspected was aimed at creating a nuclear bomb.

However, the sanctions on Iran will remain in place at least until United Nations monitors report on the country’s compliance with the deal in December. Also the deal has to be ratified by the US Congress within 60 days.

This means Iran may take until next year to bolster crude exports. Its exports may double to 400,000 barrels per day in 2016 production and will likely expand the following year, according to Goldman Sachs.