After sanctions, India's Iranian oil imports fall 16% in June

Thursday, 12 Jul, 2018

US Secretary of State Mike Pompeo said on Tuesday that America and its Gulf Arab allies want to show Iran that its actions have "a real high cost", stepping up his warnings after Tehran threatened to disrupt Mideast oil supplies.

"... If India were to replace Iran with countries like Saudi Arabia, Russia, Iraq, the United States and others for the 10 per cent of its oil demand then it may have to revert to dollar-denominated imports which mean higher CAD (Current Account Deficit) and deprivation of all other privileges Iran has offered to India", Rahaghi said.

USA in May said it would reimpose the sanctions after withdrawing from a 2015 agreement with Iran, Russia, China, France, Germany, and Britain, where Tehran agreed to curb its nuclear activities in return for the lifting of earlier sanctions.

"We are determined to convince the Iranian leadership that this malign behavior won't be rewarded and that the economic situation in the country will not be permitted to be rectified until such time that they become a more normal nation", he said.

In an address at a seminar on Tuesday, Rahaghi said Iran will end the privileges being provided to India if it tries to source oil from countries like Saudi Arabia, Russia, Iraq, the U.S. and others to offset cuts in Iranian oil import. "The zero tolerance policy and the pace with which it is moving no doubt concerns Iran's current crude buyers". While in Europe last week, Rouhani said any disruption to Iran's oil exports would result in the whole region's exports being disrupted.

Shana also reported that traditional importers of the Iranian oil - China, India, South Korea, and Japan - purchased more than 60 per cent of the Iranian output in April. Sources told Reuters last month that private refiners Nayara Energy and Reliance Industries Ltd plan to halt Iranian oil imports. Pompeo said that the USA would consider waivers for certain countries that wish to import Iranian oil, but added that Washington is determined to take a hard line on Tehran. The two firms significantly cut their imports from Iran in June. State refiners, accounting for about 60 per cent of India's almost 5 million bpd of refining capacity, lifted 10 per cent more Iranian volumes in June compared to May, at about 454,000 bpd, the data from the sources showed. In April to June 2018, the first quarter of this fiscal year, India's oil imports from Iran rose by about 24% to about 647,000 bpd from the previous quarter, the data showed.

Jahangiri said it would be a mistake to think the United States "economic war" against Iran will have no impact, but added: "We will make Americans understand this year that they can not stop Iranian oil sales".