India has to cut its oil imports from Iran by nearly two-thirds from the first quarter of 2014 after the United States (US) asked the country to hold the shipments at end-2013 levels. The US told that it currently examines Tehran's resolve to cooperate with world powers on its controversial nuclear programme and India has to cut its purchases of the crude to about 110,000 barrels per day (bpd) from its intake average to 195,000 barrel for the six months to July 20. Further, the US insisting on keeping the 11 million tonnes (MT) quota for the 2014 calendar would mean that India could buy a total oil of not more than 5.5-6 MT during January-June ’2014 period.
In November, the US and six other world powers attained a historic accord with Iran, allowing easing of some sanctions against the Islamic regime in exchange for halting its programme to attain nuclear weapon capability. According to the agreement, the world powers allowed Iran to maintain its oil exports at 1 million barrels a day to key buyers India, China, Japan and South Korea.
India is the world’s fourth-largest oil importer and a major customer of Iran’s 1.7 million barrels per day of oil exports. During April-December’2013, India had imported 6.74 MT of oil from Iran and planned to buy over 4.2 MT in the last quarter of current financial year. Earlier, six years ago, the international authorities had initiated a programme to halt Iran’s most sensitive nuclear work and targeted Iran’s financial and oil sectors, a main source of revenue for the country. Afterwards, the European Union (EU) had banned oil imports from Iran. In order to comply with international sanctions, Indian government had drastically cut its energy imports from Iran, which has been replaced by Iraq as the second-largest supplier of fuel to India, after Saudi Arabia.