Less Than 100 Hours Before Iran Sanctions, US Tight-Lipped About India

WASHINGTON: US President Donald Trump said on Wednesday in a presidential memorandum that he had determined there was sufficient supply of petroleum and petroleum products for countries to “significantly” reduce their purchase of crude oil from Iran, which is going face US sanctions from November 5.
In May, Donald Trump had pulled out of the 2015 landmark nuclear deal, the Joint Comprehensive Plan of Action (JCPOA) terming it as “disastrous”. Under the Obama-era deal, involving five permanent members of the United Nations Security Council and Germany, Iran had agreed to stop its nuclear programme in exchange of relief from economic sanctions.

Moments after coming out the deal Donald Trump had signed fresh set of sanctions against Iran and warned countries against any cooperation with Tehran on its controversial nuclear weapons programme.

In his presidential determination, Donald Trump said “there is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions.”

Donald Trump’s presidential determination, not an executive order but a kind of directive issued by the White House to the members of his adminstration on some policy matters, comes less than 100 hours before the deadline set by him for countries like India to bring its purchase of oil to zero from Iran by November 4.

India has expressed its difficulties in doing so given the galloping energy needs of its 1.3 billion people. More than 80 per cent of India’s energy needs are imported. But at the same time, India has taken steps to reduce its oil purchase from Iran, which has already declined substantially.

Recently, senior US officials were in India for talks in this regard. However, US officials are tight-lipped on the issue.

The White House also did not immediately responded to question if India’s oil purchase reductions from Iran would be considered significant. Donald Trump said he will continue to monitor the situation.

Secretary of State Mike Pompeo on Wednesday said, on the Laura Ingraham Show, that on November 5, the US will put back in place sanctions that will be very severe on the leadership of Iran. He hoped that this will convince them to change their ways.

Mr Pompeo, on the another show, said that Iran was the world’s largest state sponsor of terror. “They were squandering the people’s money, the Iranian people’s money, on these silly malign activities. And our effort is to get them to change that behaviour”.

US State Department Deputy Spokesperson Robert Paladino told reporters that on November 5, at 12:01, sanctions that were lifted under the Iran nuclear deal will come back into full effect.

“The sanctions that are reimposed on November 5th will target critical sectors of Iran’s economy, such as energy, shipping and the ship-building sectors, as well as the provision of insurance and transactions involving the Central Bank of Iran and designated Iranian financial institutions,” Mr Paladino said.

“The Iranian regime is the world’s leading state sponsor of terror, and these sanctions are meant to cut off revenues that the Iranian regime uses to conduct terrorism and fund terrorist groups around the world, and that includes Lebanese Hizbollah, Hamas, Kata’ib Hizballah and the Taliban,” he added.

“These groups foment global instability, they use these funds to support their nuclear and ballistic missile programs, and these funds are used to line corrupt Iranian leaders’ pockets rather than help the Iranian people, who are the longest-suffering victims,” Mr Paladino said.

Meanwhile, in its report dated October 29, the independent CRS said India reduced its imports of Iranian oil substantially after 2011, lowering purchases to six per cent of its oil imports by 2013, from over 16 per cent in 2008, in the process incurring significant costs to retrofit refineries that were handling Iranian crude.

“However, since sanctions were eased, India’s oil imports from Iran increased to as much as 800,000 barrels per day in July 2018-well above 2011 levels. Indian firms ended or slowed work on investments in Iranian oil and gas fields during 2012-2016, but reportedly resumed work after sanctions were lifted,” it said.

After international sanctions were lifted, India reportedly also paid Iran the USD 6.5 billion it owed for oil purchased during 2012-2016.

“The degree to which Indian firms and the government of India will cooperate with reimposed US sanctions is not certain. Indian leaders assert that Iran did not violate the JCPOA and sanctions should not be reimposed on it,” the Congressional Research Service (CRS) report said.

In June 2018, India and Iran agreed to use the rupee in order to maintain economic engagement. Nonetheless, major Indian refiners Reliance Ltd. and Indian Oil Corporation Limited – citing a decision by the State Bank of India to cease transactions with Iran as complicating efforts to stay engaged with Iran – have announced they are considering cutting oil buys from Iran.

India’s purchases of Iranian oil fell sharply from July to August 2018, and press reports say that the country might try to cut Iranian oil imports dramatically in November 2018, when US energy sanctions go back into effect,” the CRS report said.