(EnergyAsia, March 26 2012, Monday) — In defiance of US threats against countries trading with Iran, India’s Oil Minister Jaipal Reddy said it will continue to import crude oil from the Islamic regime as it does not violate international law.
India, which imports around 400,000 b/d of crude oil from Iran to meet about 12% of its domestic consumption, insists the trade embargo is not sanctioned by the UN and is therefore not valid. Its position is also adopted by China, the biggest buyer of Iranian crude.
Mr Reddy told reporters at an energy conference in New Delhi last week:
“Our companies need oil from Iran and we will continue to import without violation of international law in letter and spirit. We are expecting no cut in Iranian supplies.”
The two countries have taken their trade ties one step further by recently agreeing to partly settle payments in Indian rupee in place of the dollar in an attempt to side-step international sanctions against trade involving Iran imposed by the West over Tehran’s controversial nuclear energy programme.
The US will have to move delicately if it plans to punish India which is regarded as an important ally of the West to counter China and the Muslim world.
Mr Reddy appears to have been emboldened in his position after the US announced that it would exempt Japan and the European Union, both substantial buyers of Iranian crude, from the sanctions for six months from June 28.
Secretary of State Hillary Clinton said China and India were not granted the exemptions as Japan and the EU had given sufficient assurances that they would stop buying Iranian crude after the end of their exemption period.
India has not commented on the latest US position while China has criticised it as an act of “hypocrisy” and “double standards”.
With global oil supplies remaining tight and Brent crude holding firm at over US$120 a barrel, it is unlikely that the two Asian countries will yield much to the US campaign for an all-out trade embargo against Iran, setting the stage for further confrontations.