India’s Petroleum Minister S Jaipal Reddy (pictured) has said that, while India has not had problems paying for crude oil from Iran, the countries must be prepared for issues in the future. “We continue to be optimistic. Iran continues to be positive. However we have to be prepared for all eventualities,” said Reddy, speaking to reporters in New Delhi.
India’s oil companies import between 350,000 and 400,000 bpd from Iran, roughly 12% of the nation’s oil needs. However, new sanctions against Iran signed into law by President Barrack Obama make paying Iran for oil problematic: a bill enacted on December 31 denies access to the US financial system for any foreign bank that conducts business with the central bank of Iran.
This week, Foreign Secretary Ranjan Mathai confirmed that the Indian Government may not seek a ‘waiver’, or exemption, from the sanctions, while regional news portal Al Arabiya reports that the Government has advised state-owned oil companies to reduce their reliance on Iran. Refiners including Mangalore Refinery and Petrochemicals (at 142,000 bpd, the largest buyer of Iranian oil) have yet to renew import contracts for the year beginning in April.
A delegation of officials from India’s oil ministry, finance ministry and refiners is currently in Tehran to discuss the situation.
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