INDIA CLOSE TO WINNING US SANCTION WAIVER ON IRAN OIL
Sources, however, said no final decision has been made, and an announcement is likely just before sanctions on Iran are reimposed on November 5
India is close to a deal with the US that will allow it to continue buying crude oil from Iran without attracting any sanction, after it agreed to cut imports and escrow payments, sources in know of the development said.
US sanctions on Iran's oil buyers snap back on Monday, forcing importing countries to negotiate with the US for waivers by making cuts in purchases, or risk getting blocked from the US financial system.
India, the second biggest purchaser of Iranian oil after China, is willing to restrict its monthly purchase to 1.25 million tonnes (MT), or 15 MT in a year (300,000 barrels a day), down from 22.6 MT (452,000 barrels per day) bought in FY18, the sources said.
US appears to be satisfied with this reduction, and is willing to give the waiver provided payments for oil purchases are parked in an escrow account, which can be used for purchases from India, they said, adding the US does not want any money to reach Iran.
Sources, however, said no final decision has been made, and an announcement is likely just before sanctions on Iran are reimposed on November 5.
India had continued to import crude oil from Iran despite the threat of sanctions. Two of its refiners — Indian Oil (IOC) and Mangalore Refinery and Petrochemicals (MRPL) — have even made nominations to buy 1.25 MT of oil from Iran in November. India, the world's third-biggest oil consumer, meets more than 80 per cent of its oil needs through imports. Iran is its third-largest supplier after Iraq and Saudi Arabia, and meets about 10 per cent of total needs.
US President Donald Trump in May withdrew from the 2015 nuclear accord with Iran, reimposing economic sanctions against the nation. Some sanctions took effect from August 6, while those affecting the oil and banking sectors will start from November 5.
Currently, India pays its third largest oil supplier in euros using European banking channels. These channels would get blocked from November.
During the first round of sanctions, when the EU joined the US in imposing financial restrictions, India initially used a Turkish bank to pay Iran for the oil.