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India considering rupee-rial arrangement for importing oil from Iran following US sanctions

Sources said the US was prepared to work with countries that were reducing their oil imports on a case-to-case basis. 

Statesman News Service | New Delhi |

India is again considering the possibility of reversing to the rupee-rial arrangement for importing oil from Iran following US sanctions on the Islamic nation.

Sources on Wednesday said New Delhi expected Washington to get in touch with it over the issue of imposition of US sanctions on Iran, adding the government would be able to formulate its strategy on oil imports from the Islamic country following the talks.

“In the next few weeks, we expect to have some engagements on the issue with the US. We cannot pre-judge what the US will be doing,” sources said.

India and the US could have discussed the Iranian issue during the ‘2+2’ dialogue that was to be held in Washington on 6 July. However, the dialogue has now been postponed. India is under pressure from the US for bringing its oil imports from Iran to ‘zero’ by 4 November. Iran is India’s third largest exporter of oil after Iraq and Saudi Arabia. “The question is what do we see as national interest and how do we explain our case to the US? That’s still to be done,” sources added`

They said India was also expected to convey to the US the significance of the Chabahar port project, considering that it provided a major transport link for trade with battle-scarred Afghanistan.

Sources said there has been informal indication from the US that the Chabahar port might be kept out of the sanctions regime. The rupee-rial that arrangement was used by India to buy oil from Iran before sanctions against it were lifted three years ago. The first set of renewed US sanctions on Iran will start from 6 August and the second from 4 November.

Sources said the US was prepared to work with countries that were reducing their oil imports on a case-to-case basis. ‘’India is an oil dependent country and will act what is in its national interests,’’ they said.