India to stop importing oil from Iran; make up lost volumes from alternate sources

The MEA noted, “Government will continue to work with partner nations, including with the US, to find all possible ways to protect India's energy and economic security interests.”

New Delhi: India will stop importing crude oil from Iran following the US move to end sanction waivers, and will use alternate supply sources such as Saudi Arabia to make up for the lost volumes, top officials and industry sources said on Tuesday.

Taking note of the recent announcement made by the US Government on discontinuation of sanction waiver for importing crude oil from Iran, the Ministry of External Affairs (MEA) said that the Government is adequately prepared to deal with the impact of the decision.

The MEA further noted, “Government will continue to work with partner nations, including with the US, to find all possible ways to protect India's energy and economic security interests.”

Earlier on Monday, announcing the end of the waivers in Washington, a White House representative said, "Trump has decided not to reissue Significant Reduction Exceptions (SREs) when they expire in early May. This decision is intended to bring Iran's oil exports to zero, denying the regime its principal source of revenue."

When the US imposed sanctions on Iran in November 2018, India and seven other countries were given exemptions that will expire May 2.

Earlier on Tuesday, Ministry of Petroleum and Natural Gas said that the government has worked out a contingency plan to ensure that there is adequate supply of crude oil to Indian oil refineries from May onwards when the US lifts the waivers.

India imports close to 10 per cent of its domestic oil requirement from Iran. Though the imports fell slightly in 2018-2019 following the US sanctions, it is still significant at close to 20 million tonnes per annum.

Iran is also a commercially attractive oil exporting country as it offers better terms for oil to India including a 60-day credit period and discounts on oil and insurance.

India imports over 80 per cent oil its oil needs mainly from countries such as Saudi Arabia, Iraq, Iran, Venezuela and a few African and Latin American countries. It has started importing oil from the US over last few years, the quantum of which is expected to rise in coming months.