EghtesadOnline: India will definitely not cut off entirely its crude oil imports from Iran, but it expects to have more clarity on its oil purchasing strategy amid the US sanctions on Tehran at a meeting with top US officials next week, a senior Indian government official with direct knowledge of the country’s oil purchasing policy told Reuters.
“Definitely we are not going to zero,” the Indian official said, noting that the Sept. 6 meeting between US Secretary of State Mike Pompeo and Defense Secretary Jim Mattis with India’s Foreign Minister Sushma Swaraj and Defense Minister Nirmala Sitharaman will give more clarity on India’s oil purchases from Iran as this would be “the highest level of meeting we will have with the US”.
Analysts have been largely expecting India to scale back some of its Iranian oil imports, but not to go completely cold turkey.
India—Iran’s second largest oil customer after China—has been torn between trying not to have its sovereign and refiners cut off from the US financial system, if it were to continue importing Iranian oil, and keeping cheaper Iranian oil imports flowing, Financial Tribune reported.
Iran is eager to keep its key buyers in Asia, especially its biggest customers China and India, purchasing Iranian oil even after US sanctions on Tehran oil exports snapback in early November.
It has reportedly started to offer India cargo insurance and tankers operated by Iranian companies, as some Indian insurers have backed out of covering oil cargoes from Iran in the face of the returning US sanctions on Tehran.
India’s imports from Iran were expected to start slowing down from this month and next, as some big Indian refiners worry that their access to the US financial system could be cut off if they continue to import Iranian oil, prompting them to reduce oil purchases from Tehran.