Placing an expiry date on the sanctions waiver it had given to some countries including India, the United States on Monday warned buyers of Iranian oil to stop purchases by 1 May.

US Secretary of State Michael R Pompeo threatened sanctions on anyone who continues to buy Iranian oil after the deadline date.

Seven other countries besides India were importing oil from Iran even after the US pressed sanctions in November last year. India has been gradually halving its share of import of oil from Iran and has increasingly moved to Oil and Petroleum Exporting Countries (OPEC) for the black gold.

Petroleum Minister Dharmendra Pradhan said on Tuesday that Indian refineries are fully prepared to meet the national demand for petrol, diesel and other petroleum products.

“Govt has put in place a robust plan for adequate supply of crude oil to Indian refineries. There will be additional supplies from other major oil producing countries; Indian refineries are fully prepared to meet the national demand for petrol, diesel & other Petroleum products,” he said in a tweet.

 

US President Donald Trump expressed confidence that Saudi Arabia and other OPEC nations could “more than make up” for the loss of oil from Iran to importers.

Iran is India’s third-largest supplier of crude oil and also offers better terms to the country.

At least 10 per cent of India’s domestic oil requirement is met by Iran. The imports fell in 2018-2019 following the US sanctions and are currently at 20 million tonnes per annum.

India gets a 60-day credit period and discounts on oil and insurance from Iran.

New Delhi is now likely to increase its dependency on OPEC nations. On the other hand, India has also started to source US oil and invested in US shale gas assets.

Reports say that Indian refiners have already made arrangements for the month of May and are preparing for June. The markets from where oil will be sourced include Kuwait and Saudi Arabia as well as Mexico.

Officials are reportedly studying the US decision, which came almost in the middle of the election season in India.

External Affairs Ministry spokesperson Raveesh Kumar said that India will continue to work with partner nations, including the US, to find all possible ways to protect India’s energy and economic security interests.

“The government has noted the announcement by the US government to discontinue the Significant Reduction Exemption to all purchasers of crude oil from Iran,” he said.

“We are adequately prepared to deal with the impact of this decision,” Kumar added.

Besides India, the US decision also impacts China, Japan, South Korea and Turkey – the others who import oil from Iran.

China and Turkey, however, were not happy with the decision.

“China opposes the unilateral sanctions and so-called ‘long-arm jurisdictions’ imposed by the US,” Chinese foreign ministry spokesperson Geng Shuang said during a press briefing on Monday.

“Our cooperation with Iran is open, transparent, lawful and legitimate, thus it should be respected,” he added.

On the other hand Turkey rebuked the US over the decision saying that it will not “serve regional peace and stability”.

“Turkey rejects unilateral sanctions and impositions on how to conduct relations with neighbors,” tweeted the country’s foreign minister Mevlut Cavusoglu.

 

Reports say that the loss of oil from Iran might lead to a rise in prices in India.