INDIA HAS joined rival China in declaring it will continue to import oil from Iran despite US and EU sanctions on Tehran over its covert nuclear programme.
India’s finance minister Pranab Mukherjee rejected pressure from the Obama administration to join the sanctions given New Delhi’s massive dependence on Iranian hydrocarbon imports.
Speaking to reporters in Chicago at the weekend, Mr Mukherjee said it was “not possible” for India, the world’s fourth largest oil consumer, to reduce oil and gas imports from Iran as it needed them to sustain economic growth.
India and China together accounted for 34 per cent of Iran’s oil exports from January to September last year, slightly more than Europe, according to the International Energy Agency.
Iranian oil accounts for 9 per cent of India’s consumption and 6 per cent of China’s, according to the agency’s latest data.
Iran exports 2.5 million barrels of oil daily, approximately 3 per cent of world supplies. Of this, some 500,000 barrels went to Europe before the recent sanctions, and the remainder to China, India, Japan and South Korea.
India’s bold announcement on purchasing oil from Iran is likely to be seen as a political victory in Tehran. However, analysts said it was unclear how Chinese and Indian companies would ultimately pay for this oil without being deemed guilty of sanctions busting by US and European leaders.
Past sanctions delayed payments by Indian oil importers who had to scramble globally to find banks willing to handle transactions with Iran.