Trump is finding out that it’s going to be very difficult to get cooperation from some of the biggest oil importers in the world to boycott Iranian oil. Waging Trade Wars is not helpful in gaining diplomatic cooperation.
Although a U.S. sanction on oil from Iran comes into effect on 4 Nov, at least one country indicates that it will not comply with the American demands.
Dharmendra Pradhan, the oil and natural gas minister of India, confirmed a Reuters reports by stating that that two oil companies in India would still buy crude from Iran in November. The Reuters report indicated that 9 million barrels of Iranian oil would be bought by Indian companies next month.
China is Iran’s biggest oil customer, followed by India. India is also the third-largest oil importer globally. Although reports indicate that China will reduce Iranian oil imports, it is unlikely to comply with the US’ demands fully.
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Mangalore Refinery and Petrochemicals Ltd (MRPL) and Indian Oil Corp (IOC) have placed the orders for oil on Iran. CNBC reports that India may not use dollars to buy the oil, but use rupees instead in an attempt to circumvent the US sanctions.
The sanction imposed by the U.S. follows on Iran renegading on a nuclear deal in 2015. Other major powers do not agree with the US on this point. The US also demands that Iran pull its forces out of Iraq and Syria.
Oil prices reacted positively to the news that India would continue importing Iranian crude, with Brent crude dropping to $82.79, down 1.6%. The industry was worried that supplies would be strained by a total ban on oil exports from Iran.
Fears were also eased by a Reuters’ report that quoted a U.S. government official as revealing the US administration will consider waivers on the sanctions for any country that at least agrees to decrease their Iranian oil imports.
John Bolton, the National Security Advisor of the White House, said recently that although the administration was hoping to avoid any waivers and staunch Iranian oil and gas exports, this might not be achievable.
Pradhan was still unsure whether India would receive a waiver from the U.S. or not.