In a move that may affect the Indian economy, US President Donald Trump on Monday decided to end sanction waivers for New Delhi and seven other countries importing Iranian oil. India will now have to bring down its import of oil from Iran by May 2.
“President Donald Trump has decided not to reissue Significant Reduction Exceptions (SREs) when they expire in early May. This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue,” White House Press Secretary Sarah Sanders said.
The United States had reimposed sanctions in November on Iranian oil exports after Trump unilaterally pulled out of a 2015 nuclear accord in a bid to pressure Iran to curtail its nuclear programme and stop backing militant proxies across the Middle East.
However, Washington had granted waivers to eight countries — China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece — that had reduced their purchase of Iranian oil, allowing them to continue buying it without incurring sanctions for six more months.
India is the world’s third-largest consumer of oil and second-biggest buyer of Iranian oil after China, with 85 per cent of its crude oil and 34 per cent of its natural gas requirements being fulfilled by imports.
In 2016, India imported 215 million tonnes of crude oil and at 13 per cent, Iran stood third among India’s biggest oil suppliers, after Saudi Arabia and Iraq at 18 per cent each.
Even during the last set of sanctions between 2012 and 2015, India had continued to import oil from Iran. Although the value of oil imports had dipped from $11.6 billion in 2011-2012 to $4.3 billion in 2015-16, it had again climbed up to $8.9 billion in 2017-18.
The re-imposition of sanctions will not just impact oil imports, but will also impact the development of the Chabahar port. India has consistently conveyed that the port in Iran has a strategic value, and allows it access to Afghanistan and Central Asia.
The White House further said that the US, Saudi Arabia, and the United Arab Emirates, three of the world’s great energy producers, were committed to ensuring that global oil markets remain adequately supplied. “We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market,” Sanders said.