India’s government has not told the country’s oil refiners to halt their imports of Iranian crude, a government source said on Wednesday, even as most Indian refiners have cut down their imports ahead of US sanctions on Iran.
India is not planning to buy any crude oil from Iran in November, raising the prospect that Tehran will lose another major customer as U.S. sanctions hit.
India will settle payments for Iranian oil using rupees through local banks starting in November as US sanctions will make it difficult to settle trades through European banks, two industry sources said on Thursday.
India will not completely halt Iranian oil imports and will finalise its strategy on crude purchases from Tehran after a meeting with top US officials next week, a senior government official said.
The Trump administration’s sanctions on Iran will come into effect in November, and, as a consequence, India is preparing to cut down its oil imports from Iran. However, there’s another reason why New Delhi cannot cut its ties with Iran — Iraqi oil.
Indian refiners ordered about 12 per cent less Iranian oil in June than in May, when the US said it would reintroduce sanctions on Iran, but sales remained around 50 per cent higher than a year ago.
Speaking to Indian TV, the German minister of state for international affairs, Neils Annen, voiced hope that India would continue to purchase Iranian oil in the face of the US’s looming sanctions against Tehran.
The United States in certain cases will consider waivers for countries that need more time to wind down imports of oil from Iran as it seeks to avoid disrupting global oil markets while reimposing sanctions against Tehran, US Treasury Secretary Steven Mnuchin said.
Indian refiners cut imports of Iranian oil last month as they started weaning their plants off crude from the country to avoid sanctions by the United States that are set to take effect in November.
US Secretary of State Mike Pompeo said on Tuesday that the import of oil from Iran beginning November 4 will be a sanctionable activity but the US would consider the request for relief from a handful of countries, in an apparent reference to India which is the second largest buyer of Iranian crude.