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The US has told all buyers of Iranian oil, including India, to stop purchases by May 1 or face sanctions. The diktat will also affect China, Japan, South Korea, Italy, Greece, Turkey and Taiwan. China and India are the largest importers of Iranian oil. Iran is India’s third-largest oil supplier after Iraq and Saudi Arabia. Moreover, Iran is commercially attractive to India as it offers a 60-day credit period and discounts on oil and insurance. India has started importing oil from the US over the past few years, but the latter is yet to walk the talk on increasing the quantum and offering better sale terms to Indian companies.
Iran is troublesome for the US as it is at loggerheads with Saudi Arabia as well as the main American ally in the region, Israel. The White House wants to deprive Iran of its lifeline of $50 billion in annual oil revenue in order to force Tehran to curtail its nuclear programme, ballistic missile tests and support for conflicts in Syria and Yemen. Last year, President Donald Trump had pulled the US out of a multilateral 2015 accord negotiated by his predecessor, Barack Obama, under which Iran drastically scaled down its nuclear programme in return for promised relief from sanctions.
India should watch its interests first as the US has its own axe to grind in the Gulf. According to reports, a rupee trading mechanism is being explored with Venezuela and Iran to bypass restrictions and continue oil trade on a limited scale. Amid ongoing curbs on Venezuela’s oil industry, the latest move could prove counterproductive and hit India hard. A market report by Singapore’s DBS banking group has termed the surging prices of oil an Achilles’ heel for the Indian economy. India and other countries should exert pressure on the US to ensure adequate oil supplies, failing which the unreasonable embargo should be lifted. Global oil trade can’t be left at the mercy of a superpower’s whims and fancies.