There is a sufficient supply of petroleum and petroleum products for countries to “significantly” reduce their purchase of crude oil from Iran, US President Donald Trump has said as the November 4 deadline approached for nations like India to cut their oil imports to zero from the Islamic Republic before the imposition of major sanctions on it.
The US is trying to cut off all oil imports from Iran to zero by November 4 following Trump’s decision in May to pull out of the 2015 multilateral deal that eased global sanctions in exchange for curbs on Iran’s suspected nuclear programmes and malign activities.
India is resisting Washington’s call to reduce purchases to zero, citing the galloping energy needs of its 1.3 billion people. But at the same time, India has taken steps to reduce its oil purchase from Iran, which has already declined substantially.
In his presidential determination, Trump said “there is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions.” India, the world”s third-biggest oil consumer, meets more than 80 per cent of its oil needs through imports. Iran is its third-largest supplier after Iraq and Saudi Arabia and meets about 10 per cent of India’s total needs.
“The sanctions that are reimposed on November 5th will target critical sectors of Iran’s economy, such as energy, shipping and the ship-building sectors, as well as the provision of insurance and transactions involving the Central Bank of Iran and designated Iranian financial institutions,” Paladino said.
Meanwhile, in its report dated October 29, the independent Congressional Research Service said India reduced its imports of Iranian oil substantially after 2011, lowering purchases to six per cent of its oil imports by 2013, from over 16 per cent in 2008, in the process incurring significant costs to retrofit refineries that were handling Iranian crude.
“However, since sanctions were eased, India’s oil imports from Iran increased to as much as 800,000 bpd in July 2018well above 2011 levels. Indian firms ended or slowed work on investments in Iranian oil and gas fields during 2012-2016, but reportedly resumed work after sanctions were lifted,” it said. After international sanctions were lifted, India reportedly also paid Iran the USD6.5 billion it owed for oil purchased during 2012-2016.