Oil imbroglio

The US has made it clear that it cannot ensure the sale of its crude oil to India at concessional rates to compensate for discontinuing the purchase of cheaper oil from Iran. This tough stand leaves India, which duly stopped importing the all-important commodity from the Gulf nation last week following the American move to end sanction waivers, in a ‘take it or leave it’ situation. India was the second-biggest buyer of Iranian crude oil after China, which has also been hit hard by the unilateral decision of the Trump administration. Iran had not only fulfilled more than one-tenth of the country’s oil needs, but also provided 60 days of credit for purchases and insurance cover during transit. Such attractive terms are not being offered by other major suppliers such as Saudi Arabia, Kuwait, Iraq and the US.

Being the world’s third-biggest oil consumer, India needs to press the US to understand and address its concerns and work out a reasonable deal. Diplomatic efforts should be intensified to safeguard the country’s business interests. It is imperative to find a middle ground to resolve the trade dispute, and that too at the earliest. A recent report by Singapore’s DBS banking group termed the surging prices of oil an ‘Achilles’ heel’ for the Indian economy. Eventually, millions of consumers will feel the pinch due to the import of costlier crude.

US Commerce Secretary Wilbur Ross has stated that the government cannot force private people who own oil to give concessions. However, the US can take a call on easing restrictions on countries which have been toeing its line to clip Iran’s nuclear wings. Even as New Delhi has lined up supplies from alternative sources such as Saudi Arabia, Kuwait, UAE and Mexico, there should be no let-up in the pressure on the US to guarantee an adequate supply of oil. India may not be in a position to play hardball with a superpower, but it needs to be persistent for its own good.