Iran Oil Import: India will protect national interests: MEA

New Delhi: India will protect its national interests in the matter of oil imports from Iran, said Ravish Kumar, spokesman for Ministry of Foreign Affairs.

The other day, deputy Ambassador of Iran to India, Massoud Rezvanian Rahaghi had stated that that if India starts relying more on other countries instead of Iran for oil imports, India will lose its special privileges. The MEA's comment came in response to a query on this.

The special privileges Iran has been offering to India include payment facility in Rupee instead of US Dollars, price discounts and concessions in freight.

Ravish Kumar also pointed out Iranian Embassy had explained that the Deputy Ambassador's statement was distorted. However, he stopped short of answering a query whether Iranian imports will be reduced.

At the same time, Iranian embassy said in a statement that supplies to India will be ensured.

US gaining from the trend

America had given an ultimatum to several countries importing oil from Iran, including India that failure to scale down and stop Iranian oil imports by 4 November will attract a US embargo.

Meanwhile Reuters reported that U.S. crude oil exports to India hit a record in June and the total year to-date supply is almost double last year’s total. This is amidst reports that Indian refiners are moving to replace supplies from Iran and Venezuela in response to Trump's trade bullying.

Of late, the US has become a major crude exporter, having exported 1.76 million barrels per day (bpd) abroad in April, according to the latest government figures, Reuters reported.

This trend will continue with the projected import of more than 15 million barrels of U.S. crude to India this year through July, compared with 8 million barrels total in 2017.

Indian Oil Corporation (IOC) officials have been quoted as saying that if Chinese levies on US oil continue, then US imports to India will increase.

Now that the private sector is also very much into India's oil refining industry, the developments are likely to help US crude oil trade. Last month, India’s oil ministry asked refiners to limit imports of Iranian oil ahead of U.S. sanctions effective November.

The United States is reimposing sanctions after withdrawing from a 2015 agreement with Iran, Russia, China and several Western European countries where Iran agreed to curtail its nuclear activities in return for the lifting of earlier sanctions.

As part of enforcing the sanction, the Trump administration plans to send a delegation in the coming months to India to discuss Iran sanctions and oil issues.

“Our focus is to work with those countries importing Iranian crude to get as many of them as possible down to zero by Nov. 4,” a U.S. State Department official said.

India is the fourth largest refiner in the world by capacity, and the most of the demand being for domestic consumption in its large market, the crude oil demand is rated as robust. Thus the current trend, if it continues to cut back on Iranian crude imports, is seen not only as a commercial opportunity for U.S. producers to sell into the Indian market, but also as a signal of success of US's Iran embargo moves.