Economic Times – India has taken note of the US reimposing economic sanctions on Iran, the nation’s second-biggest supplier of crude oil, oil minister Dharmendra Pradhan said on Wednesday. “Indian refineries import crude oil from diverse sources, including Iran, depending on technical and commercial considerations,” Pradhan said in a written reply in the Rajya Sabha.
Pradhan, however, did not give a direct reply to the question whether the US had asked some countries, including India, to wind up their business with Iran by 4 November. “India has taken note of the reimposition of US sanctions on Iran in the wake of the US pullout from the Joint Comprehensive Plan of Action on May 8, 2018,” he said.
Iran was India’s second biggest supplier of crude oil after Saudi Arabia till 2010-11 but Western sanctions over its suspected nuclear programme relegated it to the seventh spot in subsequent years. In 2013-14 and 2014-15, India bought 11 million tonnes and 10.95 million tonnes of crude oil, respectively, from the country. Sourcing from Iran increased to 12.7 million tonnes in 2015-16. In the following year, Iranian supplies jumped to 27.2 million tonnes to catapult it to the third spot. In 2017-18, India bought 22.6 million tonnes of crude oil from Iran, Pradhan said.
Iran became India’s second-biggest supplier behind Iraq in the first three months of the current fiscal year, supplying 8.93 million tonnes of oil, he said.
“Oil PSUs import crude oil mainly keeping in view the domestic requirements and they have diverse crude oil sources besides Iran,” Pradhan said, adding, “India is the second largest importer of Iranian crude oil after China.”
The US, which in May pulled out of a landmark nuclear deal and said sanctions would be reimposed on Iran within 180 days, has threatened to cut off access to the American banking system for foreign financial institutions that trade with Iran. The Trump administration is piling pressure on India, China, and other buyers to end all imports of Iranian oil by a 4 November deadline as it looks to choke the Persian Gulf state’s economic lifeline with sanctions over its nuclear programme.
India pays Iran in euros for crude oil using European banking channels. During the first round of sanctions in 2012 when the European Union joined the US in imposing financial restrictions, India initially used a Turkish bank to pay Iran for the oil it bought, but since February 2013 paid nearly half of the oil import bill in rupees while keeping the remainder pending till the opening of payment routes. It began clearing the dues in 2015 when the restrictions were eased.