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India to buy Iran oil, defy U.S. sanctions

October 9, 2018

Defying the Trump administration’s warning for countries to completely stop buying Iranian oil, two Indian firms have placed orders to import crude from the Islamic Republic, India’s minister of petroleum and natural gas announced.

“We have to fulfill all our domestic requirements,” said the minister, Dharmendra Pradhan, addressing the strains the world’s third-largest oil importer now faces in attempting to find other sources.

On Tuesday, oil prices rose amid falling Iranian exports. Brent crude, the international benchmark, was up 65 cents to $84.56 a barrel. Last week it hit a four-year high of $86.74.

Speaking Monday in New Delhi at an energy forum, Mr. Pradhan also discussed the possibility of India using its currency, the rupee, to pay for Iranian crude.

That would signal a willingness by India to sidestep U.S. sanctions because the U.S. dollar is the dominant currency for the global oil trade.

Oil has been in the spotlight since President Trump withdrew the U.S. from the 2015 Obama-era nuclear agreement with Tehran in May and reimposed sanctions on the Islamic Republic in a bid to curb its aggressive behavior across the Middle East.

Even harsher penalties are set to start on Nov. 4, punishing countries who buy Iranian oil by blocking their access to U.S. markets and financial institutions.

Some Iranian oil buyers, such as South Korea and France, have halted their purchases completely while China and India, the biggest buyers of Iranian crude, are now buying far fewer barrels.

For Indian officials, a major issue has been the need to secure a waiver from Washington to allow them to slowly diversify from Iranian crude to different sources.

Last month during a visit to New Delhi, Secretary of State Mike Pompeo said the White House would only consider waivers for countries vowing to completely cut off Iranian oil.

On Friday, Reuters cited an unnamed U.S. government official as saying the Trump administration is still considering waivers.

Mr. Pradhan said India is caught in the middle of the Iran-U.S. dispute.

“We are trying to balance our relationship with the U.S. and Iran [and] at the same time keep our energy and security interest in mind,” he said. “We expect the global leadership to acknowledge India’s need for Iran’s oil.”

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