India's HPCL sees crude falling towards $60/b following Iran deal

London, (Quantum Commodity Intelligence) – Indian state refiner Hindustan Petroleum Corp said Friday it expects global crude oil prices to ease towards $60 per if sanctions are lifted against Iran, but otherwise does not see prices moving much above $70/b.

'We believe that the crude prices should be maintained at less than $70 in the long term. If the Iran deal comes favourably, it should move more towards $60 side and even if it does not, we do not see it going much beyond $70/b... some momentary spikes may be there' said company chairman M.K. Surana, speaking on an analyst call.

India was a major buyer of Iranian crude but halted exports in 2019 after its temporary waiver expired.

Talks in Vienna this week are reported to be moving towards a new deal, potentially lifting sanctions on oil exports.

Meanwhile, the Q2 2021 coronavirus wave in India has had major ramifications for demand, said HPCL.

'In May, we have got a demand contraction to the extent of almost 30% compared to 2019 levels, but if you compare against 2020 it will be 20% higher,' said Surana

But the refiner remains optimistic on a recovery going forward. 'The vaccination drive gives further hope and, in that case, I expect that the rebound should be quicker and sharper this time than the last time (2020) and that should bring back the demand,' added Surana.

Surana also said that refining margins are expected to improve as fuel demand in Europe, the United States and some Asian economies is growing.