India prepared to deal with crude shock of US sanctions on Iran, says MEA

As six-month-long exemptions from US sanctions to buy oil from Iran ended, India Thursday said it will deal with the issue based on three factors -- the country's energy security, commercial consideration and economic interests. External Affairs Ministry Spokesperson Raveesh Kumar said India was prepared to deal with the impact of the US decision. Last month, US President Donald Trump decided not to continue with the exemptions extended to eight countries including India to buy oil from Iran.

"There will be additional supplies from other major oil producing countries based on our robust plan drawn up by the Ministry of Petroleum," said Kumar at a media briefing. Kumar did not give a direct reply when asked whether India will now comply with the US sanctions against Iran and bring down the oil imports from the Gulf country to "zero", deviating from External Affairs Minister Sushma Swaraj's assertion in May last year that New Delhi only recognises UN sanctions.

"Giving a direct answer will be difficult...I can only reiterate that whatever decision will be taken, it will be combination of different factors. Enerygy securuty is one of them. Commercial considerations will be number two and third will be the economic security interests," said Kumar. On May 28 last year, Swaraj had said India will continue trading with Iran despite US sanctions, asserting that it only recognises UN restrictions.

"We only recognise UN sanctions. We do not recognise any country-specific sanctions," Swaraj said. Kumar said aspects like what amount of oil will be imported by India from other countries will be handled by the relevant ministry.

Policy of importing oil from other countries will be based on the three factors. If it fits into these three factors, then a decision on importing oil will be taken, he said. In November, the US had granted a six-month waiver to India, China, Greece, Italy, Taiwan, Japan, Turkey and South Korea to continue importing oil from Iran. The temporary waiver ended on Thursday.

In May last year, the US had brought back sanctions on Iran after withdrawing from the Iran nuclear deal which was struck in 2015.

The US had told India and other countries to cut oil imports from the Gulf nation to "zero" by November 4 or face sanctions. However, Washington had granted a six-month waiver from sanctions to eight countries, including India. India, which is the second biggest purchaser of Iranian oil after China, had agreed to restrict its monthly purchase to 1.25 million tonne or 15 million tonne in a year (300,000 barrels per day), down from 22.6 million tonne (452,000 barrels per day) bought in the 2017-18 financial year.

The world's third biggest oil consumer, India 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 its total needs.