KOLKATA (miningweekly.com) – With the Trump administration mounting pressures on India to stop crude oil imports from Iran, the option of part barter and part payment in Indian currency to buy Iranian crude, may not work this time around.
Unlike during earlier Western sanctions on Iran, India has devised a mechanism to continue crude oil imports from the Persian Gulf nation through a combination of barter trade and rupee payment bypassing Western banks. However, the US administration, insisting that India bring down Iranian crude oil imports to zero, has said that ‘secondary sanctions’ will not be waived should India fail to comply with the sanctions and it will be denied access to the US banking system.
Iran is the third largest supplier of crude oil to India accounting for an estimated 27% of the country’s crude imports, shipping in about 213.2-million tons during the last financial year.
“Yes, we are asking them to go to zero on crude imports from Iran,” a US State Department official has been quoted here in the local media.
Government officials in India have confirmed that the US has said that no waivers will be given to any country, but Indian diplomatic officials have claimed that the Asian nation is hoping for a phased reduction of imports from Iran instead of ‘zero imports’ right from November 4, when US sanctions pertaining to the oil industry come into effect.
According to the Petroleum and Natural Gas Ministry, crude oil imports from Iran, which increased 34% during 2017/18 at 213.2-million tons, were expected to rise to 217-million tons in the current financial year.
Meanwhile, the US pressure on India on imports from Iran has triggered a diplomatic logjam between the two countries with the US “postponing’ a meeting between US Secretary of State, Mike Pompeo, and India’s Minister for External Affairs, Sushma Swaraj, slated for July 6, after India communicated its reservation on toeing the US line of sanctions on Iran.
The official stand of India communicated to the US stated that “India follows sanctions imposed by the UN and not those unilaterally imposed by any country”.