Indian companies DEFY President Trump by purchasing Iranian Oil despite United States sanctions

Lloyd Doyle
October 9, 2018

Prince Mohammed told Bloomberg on Friday that the kingdom had met its promise to Washington to make up for Iranian oil supplies lost through U.S. sanctions, reimposed when the United States exited a 2015 nuclear deal between Tehran and six powers.

With the deadline for the imposition of the sanctions on Iran nearing and rising uncertainty around the potential impact of noncompliance, oil imports from Iran to major consumers (including India) dipped in the last few weeks.

Indian refiners imported around 10 million barrels of Iranian oil in October, and its November shipments are expected to be lower. "We will be guided by our national interest", he added.

The International Monetary Fund (IMF) estimates that Iran's economy fell into a recession this year that will get worse next year as a result of renewed USA sanctions on Tehran.

Iranian crude exports, which reached a peak of some 2.5 million barrels after sanctions were lifted in 2016, have plunged by over 500,000 barrels a day and are expected to dive further when expanded sanctions on oil take effect next month.

The Trump administration reimposed an initial tranche of economic sanctions on Iran in August, and will implement a second tranche in November.

Iran has warned that if it can not sell its oil due to U.S. pressure, then no other regional country will be allowed to do so either, threatening to block the Strait of Hormuz.

Iran says its oil flow to the market should not be hampered no matter what as Western oil news and information providers are steadily claiming declines in Iran's exports, putting them at about 1.7 million bpd ahead of the sanctions.

While India wants to continue importing Iranian oil, albeit a reduced volume, US Secretary of State Mike Pompeo last month stated that Washington would consider waivers on the embargo but made it clear that these would be time-limited, if granted.

Sources said Iran is open to accepting rupee payment for oil and may use the money to pay for equipment and food items it buys from India. "So let us see how it evolves".

Washington has already imposed a first round of sanctions on Iran's economy, while warning Iranian oil clients to start looking for other suppliers. Pradhan admitted Monday he was not sure India would get a waiver. "Iran's oil can not be replaced by Saudi Arabia nor any other country", Zanganeh was quoted as saying on his ministry's website. In the following year, the Iranian supplies jumped to 27.2 MT to catapult it to the third spot. This theory will be tested this week with the shutdown of 19 percent of oil production in the Gulf of Mexico due to rapidly approaching Hurricane Michael.

Under Cost, Insurance and Freight (CIF) mode of shipping, the seller assumes the responsibility of transportation and insurance.

Other reports by Iphone Fresh

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