India is stumbling into a serious diplomatic crisis with Iran over oil purchases. The pressure to end oil imports from Iran has come from the Trump administration, which in characteristic style, has warned India to reduce oil imports to “zero” if it does not want US sanctions to kick in from November 4. The arm-twisting seems to be working.
The Union government has signalled to refiners to make alternative arrangements, and in June oil imports from Iran had fallen 16 per cent to 592,800 barrels per day (bpd).Iran in various ways has made its concern known about India kowtowing to US demands. In particular, Tehran has said New Delhi has been going slow on its investment commitments for the expansion of the Iranian port of Chabahar. Once developed, Chabahar is expected to open up profitable regional trade with Iran and Afghanistan. This is something that will benefit India, but is looked at with a dim view by the United States.
As is usually the case, the US cloaks its business interests in ideological and security language. In the case of Iran, after a brief thaw in relations, Trump ratcheted up hostilities in May this year blaming Iran for violating the 2015 nuclear deal. US sanctions have been imposed again, with the expectation that the rest of the world will fall in line. The fact is the US has become a net exporter of oil and wants to take away markets from Iran, Venezuela and other exporters it does not like. In the same month, June, when oil imports to India from Iran declined, US oil exports more than doubled to 228,000 bpd from 98,000 bpd in September last year.
One can understand if the sanctions against Iran were coming from a multilateral body such as the UN. However, for the US to impose its writ via threats of sanctions deserves to be resisted. India should decide on the issue based on its sovereign interest. It is rightly worried about US power, but history has shown that regional cooperation together with resisting bullying superpowers always works better in the long run.