The United States will insist allies in Europe and Asia including India importing Iranian crude must cut imports to “zero” by November 4 when sanctions go into effect against Iran. This time there will be no waivers, unlike the previous round.
Importers of Iranian crude face the risk of being hit by “secondary sanctions” by the United States that could take various forms, but the most significant of which would be being blocked from the American financial system, which no country, developed or underdeveloped, can afford.
The official said the message has been delivered already to India and all other buyers in Europe and Asia and an interagency team of state and treasury department officials will be visiting India, China and other countries in the coming weeks.
According to the sources, India and China will be subject to the same sanctions that everybody else’s and will certainly be requested that their oil imports go to zero.
“I would be hesitant to say zero waivers ever. I think the predisposition would be no, we’re not granting waivers,” the officials said to a question about granting waivers.
India is the second largest buyer of Iranian crude after China, and Iran is the third largest supplier to India after Saudi Arabia and Iraq, and New Delhi has watched with familiar misgivings the Trump administration’s decision to tear up the Iran deal past May and announcement that sanctions will be back in force in two tranches by November 4.
It was not immediately clear what kind of conversation will the US team have with Indian officials. But external affairs minister Sushma Swaraj had said that “India follows only UN sanctions, and not unilateral sanctions by any country” days after President Donald Trump pulled out of the Iran deal.
More clarity is likely in New Delhi on the extent of cuts and waivers and all other related issues after discussions with the US team that the state department official said could be visiting soon. And these issues may even figure in discussions at the inaugural 2+2 meeting of the foreign and defence ministers of the two countries on July 6 in Washington DC.
As a result of the last round of sanctions, initiated by the United Nations and reinforced by the US and European nations, Indian crude purchases from Iran had dropped from an average of 320,00 barrels a day in 2011 to 190,000 barrels a day on the day the Iran deal — Joint Comprehensive Plan of Action — went into effect in 2016 (it was signed in 2015), ending the sanctions.
But India’s purchase of Iranian crude never went down to zero, neither did it for China and South Korea.
The Obama administration was linent and wanted to wean these countries off Iranian oil gradually and make it less painful as they found and switched to other suppliers.
But Trump administration intent on making a clean cut or just a strong bargaining position.