India engages with allies over U.S. threats on Iranian oil imports

October 13, 2018 - 22:7

TEHRAN - While the suspense continues over whether India will import oil from Iran after November, according to reports India has been engaging with allies in European Union (EU) over the issue.

A report in India Today magazine said India is engaging its allies and partners across the globe to seek a solution to the impending crisis.

It stated that India’s Foreign Secretary Vijay Gokhale had met representatives of many countries including the EU representative in New York on the sidelines of the United Nations General Assembly in September. “The conversations revolved around alternate payment options for continuance of oil imports from Iran,” it said.

The European Union is in discussion with all the stakeholders to find a legal instrument to allow transfer of payments. While they are still in the process of setting up that mechanism, it would be an option that their partners such as India could avail, the report added.

EU Ambassador to India Tomasz Kozlowski said at a conference recently that the EU was “very much in favor of full implementation of JCPOA (Joint Comprehensive Plan of Action) for political and more for practical reasons”. “We are working on the mechanism which will allow us to transfer payments to Iran and such mechanism will be open to all other partners,” he said.

Meanwhile, U.S. officials are presently in India for hectic negotiations over Iranian oil imports as the November 4 deadline approaches, according to the report.
U.S. Special Representative for Iran Brian Hook and Assistant Secretary of State for Energy Resources Francis F Fannon reportedly held meetings with officials in India’s Petroleum Ministry and Ministry of External Affairs in New Delhi on Friday.

A statement issued by U.S. Department of State said Hook will “engage our allies and partners on our shared need to counter the entirety of the Iranian regime's destructive behavior in the Middle East, and in their own neighbourhoods”, in an attempt to persuade India to bring Iranian oil to zero, or brace up for sanctions.

On Thursday, in a veiled warning to India, U.S. President Donald Trump said U.S. will “take care” of countries which defy its directives to bring their oil imports from Iran to zero by November 4. However, India Today quoted sources saying that it would be "impossible" to meet the November 4 deadline of bringing down Iranian oil import to "zero".

Responding to questions on reports that India will continue to purchase oil from Iran after November 4, U.S. State Department spokesperson Heather Nauert said this was “not helpful”.
India’s Oil Minister Dharmendra Pradhan on Monday said two state refiners had placed orders for importing crude oil from Iran in November, in defiance of U.S. sanctions.

Speaking at an event titled ‘The Energy Forum’ in New Delhi, the minister reaffirmed India’s commitment to bolster oil trade with Iran, saying New Delhi did not know whether it would receive a waiver from U.S. sanctions.

Mr. Pradhan further said that the country was considering evolving a different payment system to import Iran’s oil and that it could pay using Indian rupees, in an attempt to dump the U.S. dollar.

India’s state-run news agency PTI quoted sources saying that the two companies were Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals Ltd (MRPL) which have contracted 1.25 million tonnes of Iranian oil for import in November.

“Iran has been off-and-on taking rupee payments for oil it sells. This rupee it uses for paying for imports of medicines and other commodities. A similar arrangement is in works,” a source told PTI, adding details of the payment mechanism would emerge in the next few weeks.

Nauert, in reaction to new developments, said Trump administration had made its policies clear to all those countries, including India. “Overall with regard to those sanctions that will take effect on November 4 - and you're referring to oil sanctions for Iran and countries that choose to continue purchasing oil from Iran - we have had conversations with many partners and allies around the world about those sanctions,” she said.

Trump administration has failed to garner international support against the Iran deal, which Tehran has continued to abide by even after the unilateral withdrawal of the U.S. Last month, the EU announced that China, France, Germany, Russia and the U.K. would develop an alternative payment system to skirt the U.S. and continue doing business with Iran. India seems to be following the suit.

Iran is India's third-largest oil supplier after Iraq and Saudi Arabia. It was India's second biggest supplier of crude oil after Saudi Arabia till 2010-11 but the crippling U.S. sanctions against Iran led to significant reduction of oil imports.

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