New Delhi: Just after the US began pressurising India to stop oil imports from sanctions-hit Iran, the government is going ahead on negotiating greater oil purchases from the West Asian nation, along with Venezuela and Russia.

On Monday (October 8)Petroleum Minister Dharmendra Pradhan said the two Indian oil refiners had engaged in the Iranian crude oil for November. India is now hoping to get a waiver from the US as the sanctions are set to be in place on November 4. “Two oil companies of ours have made nominations to purchase Iranian oil in November. We do not know if we will get a waiver,” Pradhan said at The Energy Forum.
“Our national interest will guide us,” Pradhan added. He said India had requested Saudi Arabia to increase the supply of crude. Meanwhile, Indian Oil Corporation (IOC) Chairman Sanjiv Singh said India is considering Iran crude oil payments in rupee terms. At present, Iran is the third largest supplier of crude oil to India. The rupee payment mechanism has been suggested as the best possible way to cut India’s dollar exposure as well as shore up the value of the rupee, which has continued to plummet.

India had planned to import about 25 metric tonnes of crude oil from Iran in 2018-19, up from 22.6 metric tonnes imported in 2017-18. But the actual volumes imported may be far less as companies like Reliance Industries have stopped buying oil from Iran and others too are scaling it down in the hope of winning a sanction waiver from the US. Nayara Energy, formerly Essar Oil, is also stopping import from the Persian Gulf nation.

US President Donald Trump in May withdrew from the 2015 nuclear accord with Iran, re-imposing economic sanctions against the Persian Gulf nation. Some sanctions took effect from August 6 while those affecting the oil and banking sectors will start from November 4.

As a result, the US has made the issue a part of its current trade negotiations with New Delhi. “Senior US officials visiting India have suggested they may be willing to give India a waiver on America’s tariff hikes on aluminium and steel imports, provided India commits to change its sourcing pattern with regards to petroleum significantly,” a senior trade department official. India is yet to respond to this, he added.
The previous United Progressive Alliance government had also been able to bypass international sanctions led by the US after deciding to use the euro for paying Iranian producers. But India will not have access to the European currency this time around as leading European Union nations have also supported Trump’s call for sanctions.
As for Russia, New Delhi is open to a barter arrangement for the two largest imports (diamonds and oil) apart from a rupee mechanism. Global oil prices have dropped from the highest levels they reached in the early part of the year, as investors focused on rising output from other producers, such as top exporter Saudi Arabia, to compensate for lower Iranian supplies. Saudi Arabia said last week it plans to raise production in November from October output of 10.7 million barrels per day, indicating Riyadh will be increasing its supply to the highest-ever level.