Following the Trump administration's decision to end sanction waivers, India will stop importing oil from Iran according to a PTI report citing top officials and industry sources. The report also said that the country will rely on alternate supply sources such as Saudi Arabia to make up for the lost volumes.
On Monday, US decided to not renew waivers on sanctions that were imposed on Iranian in November last year. Waivers were given to some countries like India, that imported oil in large volumes from Iran, for a period of 6 months to find replacements.
"Until the waivers are not restored back, I don't think India can buy oil from Iran. We will stop importing oil from Iran," a top official told PTI.
While the waiver is scheduled to end on 2 May, New Delhi is likely to press with the US government for continuation of beyond its expiry in talks scheduled later this month, he said. In the meantime, India will not make any purchases.
The imports are likely to be now made from alternate supply sources available in Saudi Arabia, Kuwait, UAE and Mexico.
In a tweet, Oil Minister Dharmendra Pradhan said "a robust plan for an adequate supply of crude oil to Indian refineries" is in place.
"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.
The oil ministry too in a statement said a plan was in place to ensure supplies of crude oil from May when the waiver ends.
India was the second biggest buyer of Iranian crude oil after China. It bought some 24 million tonnes of crude oil from Iran in the fiscal ended March 31 (2018-19). Iran supplied more than a tenth of its oil needs.
US President Donald Trump last year withdrew the 2015 nuclear deal between Iran and world powers, and revived a range of sanctions against the Persian Gulf nation. The US administration, however, granted a six-month waiver from sanctions to eight countries, namely, China, India, Japan, South Korea, Taiwan, Turkey, Italy, and Greece on a condition that they would reduce their purchases of Iranian oil.
India, the world's third-biggest oil consumer, meets more than 80 percent of its oil needs through imports. In 2017-18, Iran was its third-largest supplier after Iraq and Saudi Arabia and meets about 10 percent of total needs.
Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 60 days of credit for purchases, terms not available from suppliers of substitute crudes in Saudi Arabia, Kuwait, Iraq, Nigeria, and the US.