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US Asks India to Stop Oil Imports From Iran by Nov 4, Threatens Sanctions

Given the huge energy needs, India and China are major importers of Iranian oil with India being the second largest buyer of Iran’s crude oil and Beijing being the third.

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Updated:June 27, 2018, 6:25 PM IST
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US Asks India to Stop Oil Imports From Iran by Nov 4, Threatens Sanctions
File photo of US President Donald Trump with Prime Minister Narendra Modi at the G20 summit in July 2017. (REUTERS)
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New Delhi: The United States has once again asserted that India and all other countries will have to stop their imports of crude oil from Iran by November 4 and thus abide by the re-imposed US sanctions on the Middle East nation.

"On China and India, yes, certainly," a state department official told reporters when asked if the US has told all countries, including India and China, to stop all their imports of Iranian oil by November 4.

The official further warned India of secondary sanctions for going against the ban. He added that Indian and Chinese companies would be subject to the same sanctions as those in other countries.

Given the huge energy needs, India and China are major importers of Iranian oil with India being the second largest buyer of Iran’s crude oil and Beijing being the third.

Soon after US President Donald Trump announced the sanctions and pulled out of the Iran nuclear deal in May, External Affairs Minister Sushma Swaraj had said: “India follows only UN sanctions and not unilateral sanctions by any country.”

The US government official, however, minced no words in threatening India with dire consequences, which would essentially mean the developing nation would be blocked from the crucial American business network.

The government official said on condition of anonymity, “Their (India and China) companies will be subject to the same sanctions that everybody else's are if they engage in those sectors of the economy that are sanctionable, where there were sanctions imposed prior to 2015. And yes, we will certainly be requesting that their oil imports go to zero. Without question.”

The official admitted that this is part of the Trump administration's efforts to isolate streams of funds to Iran. Some US sanctions take effect from August 6 while those, notably affecting the oil sector, will be effective from November 4.

This comes even as India is looking to revive a rupee trade mechanism to settle part of its oil payments to Iran, fearing foreign channels to pay Tehran might choke under pressure from the US sanctions.

"We are looking at reviving rupee mechanism ... we have to prepare ourselves," one of the sources told Reuters, adding that the current payment mechanism might not work from November.

According to reports, the government has not asked Indian oil refiners to cut Iranian oil imports, but some firms have already started reducing purchases from Tehran.
| Edited by: Sanchari Chatterjee
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