Published: Thu, July 12, 2018
Markets | By Otis Pena

Iran threat to pull out oil cushion

Iran threat to pull out oil cushion

"... If India were to replace Iran with countries like Saudi Arabia, Russia, Iraq, the United States and others for the 10 per cent of its oil demand then it may have to revert to dollar-denominated imports which mean higher CAD (Current Account Deficit) and deprivation of all other privileges Iran has offered to India", Rahaghi said.

The embassy said Iran will do its best to ensure security of oil supply to India by offering various flexible measures which facilitate bilateral trade, particularly Indian exports to Iran.

This reaction from Iran comes as a response to the USA policy which called out countries to start reducing the import of oil from Iran and bring it to zero by 4 November.

The secretary of State's comments came as the USA steps up pressure on Iran after President TrumpDonald John TrumpMcConnell to meet with Trump's Supreme Court pick Tuesday Kavanaugh offers lengthy judicial record ahead of bitter confirmation fight Hundreds protest Kavanaugh's nomination outside Supreme Court MORE's announcement in May that he would withdraw from the 2015 nuclear deal with Tehran, which sought to curb Iran's nuclear ambitions in exchange for sanctions relief.

India's monthly oil imports from Iran declined to 592,800 barrels per day (bpd) in June, down 16 per cent from May, according to data from industry and shipping sources.

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Last week, while ruling out waivers to India and Turkey - which have told Washington that they would continue to import oil from Iran - the United States had indicated willingness to work with countries that are reducing their oil imports from Iran. Imports from other Middle East suppliers also increased.

India prefers to buy Iranian oil because of the proximity of that country's ports to refineries along India's western coast and also the 60 days of credit that Tehran allows for purchases.

State refiners, accounting for about 60% of India's almost 5 million bpd of refining capacity, lifted about 10% more Iranian volumes in June compared to May, at about 454,000 bpd, the data showed. Pompeo said that the US would consider waivers for certain countries that wish to import Iranian oil, but added that Washington is determined to take a hard line on Tehran. The sources declined to be identified. Indian state refiners had cut oil imports from Iran in the 2017/18 financial year because of a dispute over the development rights for an Iranian natural gas field. Iran supplied 18.4 million tonnes of crude oil between April 2017 and January 2018 (first 10 months of fiscal 2017-18).

In the joint statement, they reconfirmed their commitment to the deal and its "economic dividends" for Iran, which has suffered worsening financial turbulence since Trump abandoned the accord, and vowed to work for "the protection of companies from the extraterritorial effects of USA sanctions".

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