New Delhi, June 29 - Neftegaz.RU. India appears to be bracing for life without Iranian oil and preparing Plan B after the US administration under President Donald Trump has declared zero tolerance against any country or entity that flouts its diktat to stop buying crude from Iran after November 4, when the 180-day wind-down period ends.
Officially, India maintains it only recognizes UN sanctions and will take up the issue with the US at appropriate fora. But the sound bytes emanating from Washington leave little doubt that India may have very little room for manoeuvre and may have to stop Iranian oil flowing onto its refineries.
An indication of New Delhi’s predicament came from oil minister Dharmendra Pradhan when he told reporters 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.»
Indeed, finding replacement for Iranian oil isn’t a problem. Iraq, Saudi Arabia and Kuwait can fill the gap. There will be some incremental increase in costs as they may not give the kind of economic sweeteners on freight and insurance that Iran offers. Iran is India’s 3rd-largest oil supplier.
For India, the real challenge is balancing it s age-old relations with Tehran and the financial/strategic stake in the Chabahar port project with the imperative of avoiding US clampdown.
«It is not like a final decision has been taken. But as a business proposition, you don’t expect refineries to wait till the last day before seeking alternative supplies. There are quantities to be contracted, logistics to be tied up, refinery feed tweaked. These take time,» one executive of a refining company said.
Private sector refiners Reliance Industries and Nayara, owned by Russia’s Rosneft, have already been winding down Iranian imports. State Bank of India, the country’s largest bank, has said it is giving up transactions for Iranian oil. Next in line could be insurers, who may refuse cover to vessels carrying Iranian oil or units that process that oil.
