New Delhi: With international nuclear sanctions on Iran being lifted on Sunday, India will resume its unrestricted import of oil from the Persian Gulf nation.
State-run Indian Oil Corp (IOC) here told IANS that the possibility of freely importing oil from Iran, to be paid for now in US dollars, comes at a time when global prices are expected to plunge further with Iranian oil adding to the supply glut.
Iran is expected to increase its export of 1.1 million barrels of oil per day by 500,000 soon, followed by a further 500,000 bpd thereafter.
The lifting of sanctions came after US Secretary of State John Kerry issued a statement confirming the International Atomic Energy Agency has verified that Iran "has fully implemented its required commitments".
The prospect of Iran doubling its crude oil exports has provoked the continuing fall in oil prices with UK Brent crude closing trade on Friday below $29 a barrel.
Brent and US' West Texas Intermediate (WTI) have declined on most days of trading this year with markets expecting supply to surpass demand.
The Indian basket of crude oils closed trade on the last trading day on Friday at a 13-year low of $26.43 a barrel, according to official data. The oil marketer cut the price of petrol and diesel by under a rupee each on the same day.
Also marking a 13-year low, the price of the Organisation of Petroleum Exporting Countries(OPEC) basket of twelve crudes stood at $25 a barrel on Friday, compared to $25.69 on the previous day, the organisation's secretariat said.
Adding to investors' worries was the lack of signs that US shale oil producers would start to cut production in face of the plunging prices.
With OPEC deciding last December against cutting output, traders are betting the cartel is less likely to cut output now to prevent easy passage of Iranian crude into the market, particularly at a time of tensions between Iran and Saudi Arabia.
Meanwhile, IOC's latest refinery in Odisha's Paradip started production of petrol from the Rs.34,555-crore facility on Sunday.
Prime Minister Narendra Modi will dedicate the 15 million metric tonnes per annum refinery, which will primarily produce BS-VI fuels to serve the eastern and southeastern markets, to the nation on February 7.