New Delhi: A day after dealing a blow to India’s hopes of negotiating a deal to avoid sanctions for Iran oil imports, the United States softened its stand on Thursday and said it was ready to work with allies on a case by case basis, suggesting that the Trump administration could offer waivers.
A senior US state department official had said on Wednesday that countries will need to cut their imports of Iranian oil to zero from November and there would be no exemptions.
“Our focus is to work with those countries importing Iranian crude oil to get as many of them as possible down to zero by November 4,” a State Department official told Reuters, adding: "We are prepared to work with countries that are reducing their imports on a case by case basis."
The statement comes after India’s oil ministry asked refiners to prepare for a 'drastic reduction’ in imports of Iranian oil from November in the first sign that the Narendra Modi government was ready to cede to the push by United States to cut trade ties with Iran.
The oil and petroleum ministry held a meeting with refiners on Thursday, urging them to scout for alternatives to Iranian oil, sources said.
US Ambassador to the United Nations Nikki Haley had also told Prime Minister Narendra Modi to lessen dependence on Iranian oil in a meeting on Wednesday.
The US push to curb countries' imports of Iranian oil comes after President Donald Trump withdrew from a 2015 deal between Iran and six world powers and ordered a reimposition of sanctions on Tehran.
Some sanctions take effect after a 90-day "wind-down" period ending on August 6, and the rest, notably in the petroleum sector, following a 180-day "wind-down period" ending on November 4.
During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil, although it had to reduce imports as shipping, insurance and banking channels were choked due to the European and US sanctions.
This time, too, government officials held a meeting with their Iranian counterparts to consider reviving a rupee trade mechanism to settle part of its oil payments to Iran but this was met by a sharp reaction from US officials.
India is the second largest buyer of Iranian crude after China, and Iran is the third largest supplier to India after Saudi Arabia and Iraq.
Sources in the government say the US’ demands of zero trade with Iran are “impractical”. During the pre-2015 round of sanctions, countries had to demonstrate they were consciously reducing energy imports from Iran. This helped India reduce its imports but maintain a relationship with Iran nevertheless.
This time, US officials had gone on record to say they would not give out waivers to allies.