Reliance Industries Ltd, India’s biggest oil refiner, said it is looking to buy more crude from Iran as the company seeks to rebuild ties to benefit from shorter shipping distances.
The company had made small purchases from Iran in the current quarter and was currently engaged in talks for bigger supplies, indicating that it could also get into a long-term supply contract, said V Srikanth, Reliance’s joint chief financial officer.
“We have had engagements with Iran before the sanctions and they have grades of crude that are attractive to us from where we are,” Srikanth said at a news conference on Friday.
India is set to import at least 400,000 barrels per day (bpd) of Iranian oil in the year from 1 April with refiners looking to ramp up purchases after the sanctions targeting Tehran ended in January, sources had told Reuters.
Iran was India’s second biggest oil supplier before economic sanctions aimed at Iran’s nuclear programme hampered its trade relations. Now, Indian buyers are being drawn back to Iran in part by freight discounts that increase as more barrels are purchased.
The comments came as Reliance posted its biggest quarterly profit in over eight years on better margins in the company’s core refining and petrochemical business.
Reliance, controlled by Mukesh Ambani, reported an estimate-topping net profit of Rs7,398 crore ($1.11 billion) for the Jan-March period — its highest quarterly profit since December 2007.
The gross refining margin on each barrel of crude processed was $10.80 a barrel, up from $10.1 per barrel a year ago, Reliance said.
Srikanth said the company will be able to sustain margins at above $10 — one of the highest among global refiners — in the current financial year.
Reliance, which still gets 95% of its profit from oil and petrochemicals, has been aggressively spending in recent years, making forays into retail and telecom and last month launched an e-commerce company.
Reliance’s Jio telecom business is expected to roll out the country’s largest 4G mobile network when it launches later this year.
The company said it has already spent Rs1.2 trillion towards setting up a pan-India telecom network and will be spending another Rs30,000 crore.
Anshuman Thakur, head of strategy at Reliance Jio said the company will expand its internal customer base for Jio’s telecom service to 20 lakh people from the current half a million people and will launch full service by the end of the year.
The company launched its telecom service for employees and business partners in December but has so far shied away from disclosing a date of a commercial launch which has been delayed for over a year.