India expects to win waiver from US sanctions on oil trade with Iran

India is hoping to win waiver from US financial sanctions on its oil trade with Iran, following significantly cut down in imports, so as to get continued supplies from the Persian Gulf nation. The government may find it difficult to import oil from July without a waiver in sanctions, as insurance companies will not be extending cover to ship carrying Iranian oil.

India is confident of getting a waiver as the US is likely to announce a new list of countries that will be given exemptions to financial sanctions on oil trade with Iran as early as next week. Earlier in March, the US had granted Japan and 10 European Union countries an exception from the sanction. The US can exempt countries from new financial sanctions, which come into effect on June 28, if they make considerable cutback to oil imports from Iran.

Imports from Iran would come to a standstill without a sanction waiver, as shippers have refused to transfer oil without an insurance cover. For the year ended March 31, 2012, India’s oil imports from Iran declined to 17.44 million tonne against 18.50 million tonne in 2010-11. Further, for the current financial year, imports are likely to be cut down by 11-20%.

India is the world's fourth-largest oil importer and second biggest customer of Iran. Top importers like Mangalore Refinery and Petrochemicals (MRPL) and Essar Oil are expected to cut Iranian oil imports this financial year and planning to buy less than 100,000 barrels per day from 142,000 bpd while Essar Oil targets a 15% slash to 85,000 bpd from 100,000 bpd. Similarly, Indian Oil, Hindustan Petroleum and Bharat Petroleum are planning to reduce their oil imports from Iran.

India otherwise openly rejects US sanctions against Iran but has privately pushed refiners to slash imports.