India to stop import of Iranian oil

New Delhi: The Ministry of Petroleum and Gas has asked the refiners of the country to prepare for a 'drastic reduction or zero' imports of Iranian oil from November. It is first sign that the government is responding to a push by the United States to cut trade ties with Iran.

India has said it does not recognise unilateral restrictions imposed by the United States, and instead follows UN sanctions.

Dharmendra Pradhan, the Minister of Petroleum and Gas, told the reporters on Thursday that the government will go by "national interests".

"In fact there is not a single oil producing country from where we don't buy crude today. So there is no threat of supply disruptions because of the latest threat of US sanctions."

Iran is India's third-largest oil supplier. If the country stops import from Iran, the gap will be filled by Iraq, Saudi Arabia and Kuwait. However, it will have to suffer a few losses due to incremental increase in costs as the Arab countries may not give the kind of economic benefits on freight and insurance that Iran offers.