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Oil, Gas, Petrochemical and Energy Field Specialized Channel

India will Continue Iran Oil Purchases despite US Sanctions

India is weighing developing an alternative payment system to purchase Iranian crude oil.

 

Indian Oil Minister Dharmendra Pradhan suggested on Monday that the nation would sustain its oil purchases from Iran, even as US sanctions against Tehran’s hydrocarbon sector take effect.

India’s state-owned Indian Oil Corporation (IOC) and Mangalore Refinery and Petrochemical have already contracted 1.25 million tonnes of Iranian crude imports for November, Dharmendra stated the “The Energy Forum” in New Delhi.

US President Donald Trump has pulled the US out of the 2015 nuclear accord with Iran, under which Tehran agreed to limit its nuclear programme in exchange for sanctions relief. The round of sanctions which would target Iran’s energy industry, would come into effect on 4 November.

The White House pushed for governments and companies to cut their oil purchases from the oil-rich nation to zero.

However, the US administration was reported on Friday to consider exemptions for countries that have already shown efforts to slash their crude imports from Iran.

India, the world’s third largest oil buyer, is not yet certain whether it would receive an exemption from the US sanctions, Dharmendra said.

US Secretary of State Mike Pompeo also said last month that Washington would weigh waivers for Iran’s oil importers as long as the country vowed to eventually cut their purchases to zero.

Moreover, the US has not taken any step towards sanctioning India for purchasing crude oil from Iran and investing in the Chabahar port, US principal deputy assistant secretary of state for South and Central Asia Alice G. Wells said.

There was no “blanket waiver or country-specific waiver” from US sanctions on trading with or investing in Iran or buying arms from Russia, Wells noted, adding that sanctions aimed to punish Iran not India.

 Pradhan also added that India was weighing developing an alternative payment system to purchase Iranian crude oil, in which the Asian nation could pay in Indian rupees (INR).

This would indicate an attempt to circumvent Washington’s sanctions on Iranian transactions using the US dollar, in which oil is traded.

 

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