US dictates India’s Iran ties

[unhappycamper]

http://indrus.in/blogs/2014/03/13/us_dictates_indias_iran_ties_33693.html

The reality is that the Indian-Iranian relationship atrophied in the recent years in almost direct proportion to the rising US-Iranian tensions and is nowhere near its full potential.

US dictates India’s Iran ties
March 13, 2014
M K Bhadrakumar

India once again has come under pressure from Washington to curb oil imports from Iran. However, mercifully, this time around the arms twisting is more like blackmail and in innuendos, which saves Delhi the embarrassment of being seen as subservient to US strategies toward Iran.

According to an exclusive report by the Reuters, India may have to cut down its crude oil imports from Iran in the coming months by as much as two-thirds so as to keep the quantum of its half-yearly imports below the threshold prescribed by the US for India. It appears that sometime last month a “top US energy policy official” conveyed to Indian ministries that the quota allocated for Washington for the six-month period upto July entails that India should not import from Iran more than 195,000 bpd between January and July this year. Of course, if India doesn’t comply with Washington’s directive, that will trigger US sanctions.

The Indian authorities have reportedly assured the American official that they will comply with the tolerance level prescribed by Washington. But then, Indian companies have already entered into contracts to import Iranian crude, which work out to an average of 322,000 bpd in the first quarter of the current year (January to March). This means that in the next quarter (April to June), India needs to cut its crude purchases from Iran to about 111,000 bpd so as to ensure that the ceiling prescribed by Washington – intake average of 195,000 – is not breached. This is notwithstanding the fact that Tehran is giving India a discount on crude and is offering free delivery.

What emerges is that Delhi jumped the gun sometime toward the end of last year, blithely assuming that the US-Iranian engagement implied a more relaxed attitude in Washington toward India’s oil trade with Iran. It turned out to be bad political judgment, however. As President Barack Obama claimed recently the US intends to keep “95 percent” of the sanctions against Iran in place until a nuclear deal is concluded. Unsurprisingly, the US is extra-vigilant that in the interim the top buyers of Iranian oil such as India do not erode its sanctions regime.