India to cut imports, may not seek waiver

Source: LiveMint.com, Jan 12, 2012

New Delhi: India’s government has told refiners to reduce Iranian oil imports and find alternatives as New Delhi may not seek a waiver that would protect buyers of Tehran’s oil from a fresh round of US sanctions, two industry sources said on Wednesday.

India, Iran’s second largest oil buyer after China, is already struggling to pay for the crude due to existing sanctions, and fresh US measures aimed at isolating Iran over its nuclear programme will make payment even harder. India buys from Iran about 12% of its oil needs, or 350,000-400,000 barrels per day.

Indian oil companies were told by officials at a meeting on Monday that the government was not planning to seek an exemption from the US sanctions, and were advised to reduce dependence on Iran and be ready with alternative supply sources.

“The companies have been told to reduce Iranian supplies and the government is not planning to seek a waiver,” said one of the industry sources, who declined to be identified due to the sensitive nature of the matter.

The second source said the government appeared to believe that a waiver from the sanctions would provide only temporary relief as the exemption would only be for 120 days.

A senior Indian government source with direct knowledge of the matter said “no decision has yet been taken” on seeking exemptions under the US sanctions.