KOLKATA (miningweekly.com) – India is negotiating with the US for exemptions from “extended sanctions” to maintain its current level of crude oil imports from Iran, but the country is also under pressure from the US administration to halt all crude purchase from Venezuela.
According to officials here familiar with ongoing negotiations, India has reduced crude oil purchase from Iran since the US administration imposed sanctions on Iran, but is seeking an extension of exemptions granted earlier to maintain its current lower level of 1.25-million tons a month crude purchase from the Persian Gulf nation.
The US had slapped fresh sanctions against Iran in November after pulling out of the six-nation agreement with Iran. Extended sanctions were applicable to countries continuing to have transactions with Iran, but India was among the countries offered temporary reprieve from such extended sanctions.
This extension is slated to expire in May and by implication India will have to completely stop buying Iranian crude thereafter, unless granted an exemption in the meantime.
As things stand now in bilateral negotiations, the US is willing to consider extending the extended sanctions in the case of Indian crude purchases from Iran, but administration officials have reportedly made it clear that in such a case, India will have to adhere to US sanctions against Venezuela as “India could not have it both ways” in continuing crude imports from both countries under sanctions, officials say.
Hence, if any agreement is to be concluded between India and the US, the former will have to make a choice in terms of sourcing crude from either of these oil producing countries, the officials add.
Venezuela is India’s fourth largest source of crude oil after Saudi Arabia, Iran and Iraq. India has so far been maintaining that US sanctions against Venezuela and the latter’s national oil company, Petroleos de Venezuela, in particular, were “unilateral” and not ratified by the United Nations. Hence India was also exploring the option of continuing crude oil imports from the Latin American country through rupee payment or barter trade options.
However, this state of affairs is now under fresh risk as the granting of exemption from sanctions against Iran and continued imports from Iran will be used as a bargaining tool by the US administration to bring India in line with sanctions against the Nicolas Maduro government in Venezuela, officials say.
They say that the Indian government has taken note of the recent statement from US National Security Adviser John Bolton that “nations and firms that support Maduro’s theft of Venezuelan resources will not be forgotten”, putting pressure on India’s negotiations with the US over continuing crude oil imports from both Iran and Venezuela.