THE IRAN EQUA­TION

Business Today - - THE BUZZ - –Anilesh S Ma­ha­jan.

COM­PLEX­I­TIES RE­LAT­ING to Iran will stay con­tentious. As New Delhi is fi­nalises its agenda for the first 2 + 2 di­a­logue be­tween In­dia’s For­eign Min­is­ter and De­fence Min­is­ter with their Amer­i­can coun­ter­parts, of­fi­cials are look­ing for a win­dow al­low­ing In­dia to re­duce Ira­nian oil im­ports to last years num­bers.

US Sanc­tions re­quire In­dia to cut all sup­ply from Iran by Novem­ber 4; but it is dif­fi­cult to re­place oil from Iran –the sec­ond largest sup­plier af­ter Iraq—roughly 457,000 bar­rels a day in Q1 FY 2018/19, with a peak in May of 771,000 bar­rels a day im­ports. Af­ter dou­bling (Q-Q) from Q1 FY 2017/18 im­ports of 279,000 bar­rels, In­dia started cut­ting im­ports by 66,000 bar­rels.

Saudi Ara­bia in a bid to re­gain its mar­ket share lost to Iran (when the lat­ter of­fered steeper dis­counts), has of­fered to ramp up pro­duc­tion. But Iran is crit­i­cal to New Delhi’s larger strat­egy in the sub-con­ti­nent to counter China. For now, it’s wait and watch.

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