India Gives in to US Pressure, Fully Stops Import of Iran Oil

Will need to eat some more baby food before it's a real independent power

  • India got a much better price with Iran than other suppliers and could pay in rupees
  • The US is now pushing India to increase its purchases of US shale oil

India has completely stopped the import of oil from Iran under pressure from the US, multiple sources have told ThePrint. New Delhi is, however, negotiating with Washington to allow it to procure pending shipments for which contracts have already been signed with Iran.

India’s decision is in adherence with a directive from the Trump administration, which called for New Delhi to end to all its import of crude and petroleum products from Tehran.

India and seven other countries that rely on Iran for their energy needs were granted a six-month waiver by the US last November after Washington walked out of the nuclear deal and imposed multiple sanctions on the Rouhani regime, particularly over crude exports that are the mainstay of the Iranian economy.

The deadline for the so-called waiver, also called the Significant Reduction Exemption (SRE), expired on 2 May, according to official sources.

“We have some slack for shipments on the high seas or where contracts were already concluded for offtake, so we are negotiating with the US to at least allow those to go through,” said an official who is involved in the talks and spoke on condition of anonymity.

The official said the discussions are going on with the US government but nothing positive has yet come out of the talks.

According to another official from the Ministry of Petroleum and Natural Gas, however, India is hopeful that the existing contracts and orders that were already placed with Iran will not be halted.

While Iran, which continues to rely on oil sales to run its economy, has been under sanctions for several years, India has always found a way to manoeuvre around them. This, however, is the first time that India has completely stopped procuring oil from the country, sources added.

Oil on the way

Sources said that at present, two vessels loaded in April with 4 million barrels of crude from Iran are expected to reach India this month. Of these, one is expected to reach the Paradip port in Odisha and the other Kochi in Kerala.

The official from the Ministry of Petroleum and Natural Gas added that India had been taking steps to reduce its imports from Iran since the US walked out of the Iran nuclear deal, the Joint Comprehensive Plan of Action (JCPOA).

New Delhi has considerably reduced its oil imports from Iran over the last six months.

India has been Iran’s second largest customer after China. New Delhi imports 80 per cent of its crude oil requirements and Iran accounts for 13 per cent of these imports, according to the oil ministry.

But between January and April this year, crude imports from Iran have gone down by over 40 per cent. In April, India’s imports from Iran dropped by 57 per cent compared to the corresponding month in the previous year, according to data by the Directorate General of Commercial Intelligence and Statistics (DGCIS).

Consumption, however, is rising. In 2018-19, India’s total oil consumption was 211.6 million metric tonnes compared to 206.2 MMT in the previous year — an increase of 2.7 per cent, according to official data.

US to ‘make up’ for Iran

While the Modi government has downplayed the adverse impact of its decision of not procuring oil from Iran, sources said this will impact supplies going forward.

Sources added that the US is taking all steps to make up for the supply shortage that India may face due to the absence of Iranian oil. The US is now pushing India to increase its purchase of shale oil.

This was among the main agenda for which Alice Wells, US principal deputy assistant secretary of state for South and Central Asia, visited India last month before the waiver expired. Washington is presently also undertaking measures to keep the international prices of crude under control.

India, meanwhile, is also looking at Saudi Arabia and UAE to come to its rescue.

There appears to be some positive news on that front. “We have always assured India that UAE is ready to cover any shortfall in its oil imports,” UAE Ambassador to India, Ahmed Al Banna, told ThePrint. “We have stood beside them in the past as well when there were embargos on Iran. We are working with our Indian partners closely.” [At a considerably higher price than Iran would have.]

According to oil ministry data, Iraq is the top supplier of crude to India followed by Saudi Arabia. Iran remains the third largest supplier of oil despite a reduction in inbound shipment. Besides these three, UAE and Venezuela have also supplied a large chunk of India’s crude requirements. [That’s Venezuelan oil transfered to Rosneft to settle debt.]

Sources said an increased amount of imports are likely from Saudi Arabia from June. But the quantum has not been decided yet as all these issues will be clearer once a new government takes charge.

Source: The Print

  1. Budy Boy says

    Very disappointing !
    India doest realize the best thing that could happen is US sanctions so the US would cut themselves off & India can force themselves to find other means !

  2. Inferior says

    Mr. Modi would like to appear strong man, standing up to nations that threaten India in any way, as a defender he claims to punish those would wish India any harm and by last stunt in which AIF ventured into Pakistan he portrays just that picture. Yet this strong man has caved in without a fight when faced with USA’s illegitimate demands. Under the leadership of Congress party India never totally gave up its own right to do business whom ever India pleases. But the supposedly strong man has proven to be not so strong after all. Iran was selling its oil for penny. And those penny’s were not even Euro or Dollars but Rupees. India even has invested into Iran. India can benefit by allying with Iran to bring about stability in not only Afghanistan but also Pakistan which would further secure India’s position. But India has chosen to be yet another slave of USA despite being a founding member of Non-Aliened Movement, an organization of more than 120 countries. What a shame.

    1. silver749 says

      Very similar to the somewhat cowardly EU. They are big bully boy’s against their own member states.

  3. Séamus Ó Néill says

    These cowards make it so much easier for America to continue its global genocidal bullying. America makes its own satanic laws and then surreptitiously and illegally apply them to the rest of the world. Until countries stand up to this psychopathic maniac , millions more around the world will be butchered with impunity ! Maybe India will always be a subservient country , without pride or dignity.

  4. John C Carleton says

    Iran has never attacked America.
    America has never attacked Iran.

    USA/WASHINGTON DC, has never stopped attacking Iran.
    America, and the USA/WASHINGTON DC, have never been, is not now, and will never be the same thing as America.

    USA/WASHINGTON DC is a foreign sub corporation of the evil Khazarian Rat run British Empire.

    Freedom for Iran from the evil of the USA.
    Freedom for America from the evil of the USA.

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