The US administration on Monday ended the waiver which had allowed India after several rounds of high level consultations between the two countries to buy Iranian oil.
In response to the Trump administration’s decision of ending waivers to buy Iranian oil, on Tuesday India said that it is “adequately prepared” to deal with the impact of the US decision. Presently, Iran oil is fulfilling around 10 per cent of India’s energy requirement.
An official statement issued by the Ministry of External Affairs (MEA), stated “Government has noted the announcement by the US government to discontinue the Significant Reduction Exemption (SRE) to all purchasers of crude oil from Iran and it will continue to work with Washington and other partner countries to find “all possible ways” to protect its energy and economic security interests.”
In March, when Foreign Secretary Vijay Gokhale was in Washington DC for the India-US Strategic Dialogue he had during his meetings with the top officials discussed possibility of extending the waivers.
The US administration on Monday ended the waiver which had allowed India after several rounds of high level consultations between the two countries to buy Iranian oil. White House Press Secretary Sarah Huckabee Sanders while announcing the decision in Washington had said that US President Donald Trump had decided not to reissue SREs when they expire in early May.
According to the official spokesperson of MEA Ravish Kumar, India is adequately prepared to deal with the impact of this decision.
Earlier in the day, the Petroleum Ministry in a statement said that the government has “put in place a robust plan” to ensure that there is adequate supply of crude oil to Indian oil refineries from May 2019 onwards. Adding that there will be additional supplies from other major oil producing countries from different parts of the world.
The US administration’s decision to stop Iran’s main source of revenue, will also impact other countries including China, Japan, South Korea and Turkey.
India has been purchasing crude from Iran as that country gives better terms and conditions which include insurance, discounts as well as credit period up to 60 days. After the imposition of US sanctions India’s imports from that country fell in 2018-2019, though it is still close to 20 million tonnes per annum.
Though there is no clarity if there is any specific time for completing pending transactions, US announced that not only is it increasing its own oil production, but assured that it was working with Gulf countries including Saudi Arabia and the United Arab Emirates (UAE) in an effort to ensure that there are no disruptions in production and delivery.
In 2018 May, the Trump administration had withdrawn from the 2105 international agreement with Iran related to de-nuclearisation which had ended the earlier US sanctions. Sanctions were re-imposed in November and the administration had given six month waivers to countries including China, Japan, South Korea, Taiwan, Turkey, Italy and Greece too for buying oil.
Both India and Iran managed to carry on the oil trade in their local currencies.