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Royal Dutch Shell Plc (RDSA) sold two high-sulfur oil cargoes to Mangalore Refinery & Petrochemicals Ltd. (MRPL), the biggest state-run Indian buyer of Iranian crude, as supplies from the Persian Gulf state may be disrupted because of global sanctions, Bloomberg reported.

Mangalore, a unit of Oil and Natural Gas Corp., bought 650,000 barrels each of Oman and Banaco Arab Medium crude from Shell for loading next month, according to four traders who asked not to be identified because the information is confidential. The grades are similar to Mangalore's imports from Iran, the traders said.

Indian refiners may halt Iranian crude purchases as local insurers refuse to cover the risks for using the oil, P.P. Upadhya, the managing director at Mangalore, said March 8.

The company, known as MRPL, has an contract to buy 5 million metric tons a year from the Islamic Republic.

The insurance difficulties are a result of sanctions enacted by the U.S. and its allies in July to restrict Iran's oil exports, the nation's largest source of revenue.

The countries are trying to pressure Iran to curb its nuclear program, which they say is designed to develop an atomic weapon. It says the program is for civilian purposes including electricity production and medical research.
Masila Crude

MRPL bought the Oman crude for loading from April 16 to April 30 at a premium of about $1.70 a barrel to Dubai crude on a cost and freight basis, the traders said.

Shell received about $1.50 a barrel more than Dubai for Bahrain's Banaco, which will be loaded in the first half of next month, they said.

The company also purchased 650,000 barrels of Yemen's low- sulfur Masila crude from Arcadia Petroleum Ltd. for loading in the second half of April, the traders said.

The Masila was purchased as a part of the company's regular crude requirements and isn't related to the difficulty in receiving Iranian oil, two of the traders said.

MRPL may import 3.8 million tons of Iranian crude during the year ending March 31, down from its term contract for 5 million, Managing Director Upadhya said on Jan. 31. Shipments of "even 3.8 million tons in the next financial year may be difficult," he said.

Iran slid four places to become India's seventh-largest crude supplier from April to December as the South Asian nation reduced imports, according to data given to parliament on March 15 by P. Lakshmi, the Indian junior oil minister.