In July 2015, the five permanent members of UN Security Council alongside Germany sat on the same table to forge the said pact with Iran that said all the sanctions on it will be removed if Iran, altogether, abandons its nuclear program. But apparently, this pact with Iran was offending the eyes of Donald Trump, right since his election to the US top office. He, in May last year, rubbished the pact, saying that US could forge a better deal by putting more pressure on Iran and, officially, withdrew from the Iran deal. Trump, at first, targeted Iran’s economy to compel President Hassan Rouhani to give in to the US pressure by foisting sanctions on Iran’s oil business.
US asked Iran’s top oil importers including India, China, Japan, South Korea, Turkey, Taiwan and others to avoid purchasing Iranian oil. Although, initially all these countries showed their reluctance owing to their rising energy needs, following which US gave a waiver of sanctions for six months to some of the leading buyers of Iran oil. Now that, the deadline of those sanctions waiver is due to expire on May 2, US has issued a warning to the world of lethal consequences against the further oil imports from Iran.
Now the questions that arise are – how will India take it all in its stride? Will India succeed in persuading US for further sanctions waiver using its diplomatic wit? Can India afford to lose a strategic partner in middle east region like Iran, taking in account to Chabahar Port investments? Well for now, the answer of all these questions lies in the dark.
Being the third largest oil importer of Iran, India, while purchasing former’s oil, enjoys privilege of making the payments in Euro or Rupee and, for that matter, India imports a big chunk of an 18% of its total oil needs from Iran and Venezuela. Though, India is mulling over the option of oil import from US but if so, only the transport price will cost India an arm and a leg. Interestingly, according to reports, India and US also negotiating to bring down the transport cost of oil from US to India–more or less tantamount to the cost from Iran to India. But, for the time being until a deal is freezed, India is bound to bridge this lacuna of 18 % through other sources like Saudi Arabia, Iraq, UAE and Nigeria.
The ongoing scenarios bode ill for the international oil prices in the days to come. Provided India being the largest and a significant strategic partner of Chabahar Port project in Iran, putting the relations with Iran in the corner, too, is not in India’s favor. In this backdrop, India’s diplomatic wit and poise will be tested as how India fulfils its near future oil demands and, for that matter, without flying in the face of a significant diplomatic and strategic partner like US.