The US has agreed to let eight countries, including its strategic allies India, Japan and South Korea, to keep buying Iranian oil after it reimposes sanctions next week
NEW DELHI – India is set to continue oil imports from Iran with the US agreeing on waivers for eight countries regarding sanctions set to kick in on November 5 and there are no plans to cut crude purchases from Tehran to zero, people familiar with the development said. The US has agreed to let eight countries, including its strategic allies India, Japan and South Korea, to keep buying Iranian oil after it reimposes sanctions next week, an unnamed senior US administration official was quoted as saying by Bloomberg on Friday. China too is among the countries, though terms for its waiver are being finalised, the report added.
Announcing the imposition of sanctions targeting Iran’s oil and gas exports, ports and banking system, secretary of state Mike Pompeo said on a conference call with reporters the US will grant waivers to “eight jurisdictions” because they had “demonstrated significant reductions in crude oil and cooperation on many other fronts”. He said a list of the countries will be released on Monday.
India is also likely to be given a carve-out for operating Chabahar port in Iran, under a waiver clause linked to the reconstruction effort in Afghanistan, people familiar with the developments in Washington said. The waiver is the outcome of prolonged and complex negotiations between India and the US over the past few months, during which the Indian side highlighted its energy security concerns and problems related to finding a new supplier that could provide the same volumes at similar prices if imports from Iran were totally halted, two people familiar with the discussions said.
Unlike Japan and South Korea, which temporarily stopped oil imports from Iran in September, Indian Oil and Mangalore Refinery and Petrochemicals continued purchases though the overall volume dropped slightly from around 10 million barrels in October to nine million barrels for November.
“There is no current possibility of going to zero,” one of the people said, referring to the repeated demands by key US officials, such as Pompeo, that all countries cut Iranian oil imports to zero.
India’s imports in the coming months are expected to hover around the nine million barrel mark, the people said.
Iran is the third-largest supplier of energy for India, after Saudi Arabia and Iraq, and offers various incentives that make it a more cost-effective supplier.
India is Iran’s second largest purchaser of crude and Tehran accounted for almost 20% of New Delhi’s oil imports in the first quarter of 2018-19. The cost is a key factor for the Indian government at a time when the rupee has been hit by the appreciation of the dollar, the people said. Any drastic cut in imports could also have driven up oil prices, they added.
