India to stop Importing Crude Oil from Iran
In the backdrop of the US refusal to extend the sanctions waiver for India to import crude from Iran, the Ministry of Petroleum and Natural Gas has taken steps necessary steps to end the imports from Iran.
Even though India has urged the US to restore the sanction waivers it has decided to not to proceed with the purchase as the oil trade cannot happen in anticipation.
Ministry of Petroleum and Natural Gas has stated that a robust plan for an adequate supply of crude oil to Indian refineries is in place. It has been stated that shortfall will be met through alternate supply sources available in Saudi Arabia, Kuwait, UAE and Mexico.
Meeting the Shortfall
India which is the world’s third-biggest oil consumer meets more than 80 per cent of its oil needs through imports. In 2017-18, Iran was India’s third-largest supplier after Iraq and Saudi Arabia and about 10 per cent of total needs were met through imports from Iran.
India can avail optional volumes (over and above the term contracts) from a number of suppliers which it can exercise to make up for any shortfall from Iran. India also plans to avail the route of spot market to source crude.
But the cause of concern is more related to prices in India. When President Trump had first pulled out of the nuclear deal, oil shot up to over USD 85 a barrel and it fell to near USD 50 after the US administration unexpectedly granted the waivers.
Category: Economy & Banking Current Affairs