US to help India out of oil crunch

US to help India out of oil crunch

With a tougher round of US sanctions on Iran coming into effect from November 4, a top Trump administration official said Washington recognises India’s need for oil imports and is having conversations to ensure there are alternative supplies 'so that our friend India’s economy is not adversely affected'.

Earlier this year, the US had withdrawn from the 2015 Iranian nuclear deal and reimposed a series of tough sanctions on Iran.

While the first phase of sanctions is in place, the sanctions would come into full force on November 4 and the US expects all countries, including India, to bring down their import of Iranian oil to zero.

The US has made it clear that any country that continues to do business with Iran will be blocked from accessing the American banking and financial system.

However, the sanctions are not endorsed by the UN and it has been a traditional policy of India to enforce only UNSC-authorised sanctions.

Though India, one of the biggest importers of Iranian oil, has already reduced its import, it has indicated that it is unlikely to go down to zero given its energy needs.

'The US is consulting with all of its friends and partners to discuss the implementation of the sanctions after the snapback...we recognise India has a need for significant oil imports. Part of the conversation is how to ensure that there are alternative supplies of oil so that our friend India’s economy is not adversely affected,' the  Principal Deputy Assistant Secretary for the Bureau of South and Central Asia Region , Ms. Alice Wells, said.

She said Indian private sector firms are exploring new suppliers and the conversation between the US and Indian experts continues on the implementation of the sanctions.
Asked about the impact of the US sanctions on projects like Chabahar, Ms. Wells said that issue is under close review.

'We very much appreciate what India has done to provide both assistance to Afghanistan, including through using Chabahar Port for the delivery of wheat. We also very much appreciate what India has done to allow Afghanistan to diversify its trade relationships, and again Chabahar has played a role there.  So those factors will certainly be taken under consideration,' she said.

The Chabahar port is being considered a gateway to golden opportunities for trade by India, Iran and Afghanistan with central Asian countries besides ramping up trade in the wake of Pakistan denying transit access to New Delhi.

In May 2016, India, Iran and Afghanistan inked a pact which entailed establishment of Transit and Transport Corridor using Chabahar Port as one of the regional hubs for sea transportation in Iran, besides multi-modal transport of goods and passengers across the three nations.