Indian public sector oil refiners could soon start sidestepping U.S. sanctions against Tehran’s petroleum industry by importing Iranian oil from Iranian tankers.
Reports over the weekend detailed an Iran-India deal in which Tehran will arrange tankers and insurance because India’s top shipper, Shipping Corp of India (SCI), had begun halting oil shipments fearing re-imposed U.S. sanctions.
Washington has been re-imposing economic penalties on Tehran since President Trump withdrew the U.S. from the 2015 Iranian nuclear deal in May. In a bid to slash Iranian oil experts to zero, U.S. sanctions on Iranian petroleum are scheduled to start in November.
Mr. Trump has warned that those anyone who does not cut their economic ties to Iran will “risk severe consequences”.
The high-stakes gambit appears to be working, with scores of major international companies, including France’s supermajor oil and gas company Total and carmaker Renault, ending their business with Tehran.
In the oil markets, there is also “an emerging pattern” showing that “U.S. sanctions are succeeding in throttling Iran’s sales to its customers even before the measures take effect in early November” Bloomberg reported this weekend.
However, the two top buyers of Iranian crude — China and India — appear to be throwing the Islamic Republic a lifeline.
This weekend’s move by New Delhi to keep Iranian oil flowing, according to analysts, is similar to a push in China where buyers are shifting nearly all their Iranian oil imports to ships owned by National Iranian Tanker Co (NITC) — with Tehran offering almost free shipping and an extended credit period.
The agreement, according to Reuters, also sees Iran providing insurance, an issue due to the non-availability of coverage by Western insurers because of the re-imposed sanctions.
Over the weekend, The Times of India reported that officials in New Delhi are likely to use the threat of continued Iranian oil imports as a bargaining chip in talks scheduled for Thursday with Defense Secretary James N. Mattis and Secretary of State Mike Pompeo.
Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.