NEW DELHI—India is exploring the possibility of increasing crude-oil imports from Iran, following a recent deal between Tehran and world powers that is expected to ease sanctions on Iranian crude, an Indian official said.
While sanctions on Iran’s sales of crude oil are yet to be eased, observers say the deal is likely to lead to a gradual loosening of existing restrictions on dollar-based payments that would enable importers such as India to buy more crude from Iran.
India and Iran presently have a barter trade system in place to bypass payment problems caused by the Western sanctions. Under an agreement last year, India pays for about half its crude-oil imports from Iran in Indian rupees instead of U.S. dollars.
Indian and Iranian officials had detailed discussions on the possibility of increasing crude-oil imports from Iran, India’s Economic Affairs Secretary Arvind Mayaram told reporters after a meeting with an Iranian delegation in New Delhi.
Iranian officials who attended the meeting declined to comment.
Iran was the second-largest supplier of crude oil to India until around two years ago, before the sanctions were imposed. Iranian crude supplies have gradually declined in line with a U.S. requirement that India and some other countries—including China and South Korea—steadily diminish their purchases.
India is likely to import around 11 million metric tons of crude oil from Iran in the current year ending March 31, about 15% less than the previous year. Imports from Iran are expected to start rising after six months, when Western sanctions on Iranian crude sales are expected to be eased, some observers say.
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