India seeking extension of waiver on Iran’s oil imports

March 8, 2019

New Delhi is negotiating with Washington about extending a waiver of U.S. sanctions on imports of oil from Iran which will expire in early May, two sources in India with knowledge of the matter said.

The major Asian buyer of Iranian oil wants to keep buying crude from Iran at its current level of about 300,000 barrels per day (bpd), the sources said, Reuters reported.

India is among eight countries with the U.S.’ 180-day waivers allowing them to keep importing Iranian oil through May 4.

All transactions under the U.S. State Department's current "significant reduction exemptions" must be completed by May 4.

Fresh waivers would start on May 5 for countries that the U.S. determines have met their promises to significantly reduce Iranian imports in the previous six months.

India has reduced its purchases of Iranian oil, but has been in talks on extending a sanctions waiver, known as a significant reduction exception, a senior India official said in January.

The United States reimposed sanctions against Iran last November in a dispute over Tehran’s nuclear program, after President Donald Trump pulled Washington out of a 2015 nuclear deal between Iran and six world powers.

Although the United States granted Iran’s biggest oil customers - China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece - waivers that have allowed them to continue limited imports, Washington is putting pressure on governments to eventually reduce purchases of Iranian oil to zero. The first round of waivers expires around May 4.

Vincent Campos, a spokesman at the U.S. State Department’s energy bureau, would not confirm that India was asking the United States to renew its waiver, but said talks are ongoing with the eight consumers of Iran’s oil that received waivers in November with the aim of eventually cutting imports to zero.

“We continue to have bilateral discussions” with each of the countries, including India, Campos said, Reuters reported.

A U.S. State Department official is this week visiting South Korea, Iran’s fourth largest oil customer in Asia, to talk about sanctions, Seoul said.

David Peyman, a deputy assistant secretary for counter threat finance and sanctions, met on Wednesday with Hong Jin-wook, an official specializing in African and Middle Eastern affairs at South Korea’s foreign ministry.

Peyman offered “to continue to closely consult on the extension of sanctions exemption and Korean companies’ technical issues regarding trade with Iran,” a statement from Seoul’s foreign ministry said.

The U.S. State Department did not immediately respond to questions about their talks.

Talks with Washington on extending the waiver slowed due to the U.S. government shutdown that extended through January, one of the Indian sources said. Talks have now resumed and India wants to get clarity before general elections scheduled in May, the source said.

No immediate comment was available from India’s oil or external affairs ministries.

Iran was India’s seventh biggest oil supplier in January, as compared with its position as third-biggest a year ago before the reimposition of sanctions.

(Source: staff & agencies)

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