New Delhi: If the US sanctions on Iran are relaxed, India will consider repurchasing oil from there at the same time. This will help India diversify its source of imports. A senior government official said this. Following the US government’s sanctions on Iran, India stopped oil imports from there in mid-2019. The United States and other powerful countries are meeting in Vienna with the intention of bringing the Iran Nuclear Agreement back on track.
“Once the ban is lifted, we can consider importing oil from Iran,” the official said. He said that Indian refinery companies have started preparations in this context and they can contract as soon as the ban is lifted. With the arrival of oil from Iran, not only will the prices in the market soften but it will also help India diversify its source of imports. Iraq was India’s largest oil supplier in FY 2020-21. It was followed by Saudi Arabia and the United Arab Emirates. Nigeria was fourth and America was fifth.
The official said, “We have been demanding from the oil producing countries to increase production by removing the production limit … The increase in the price of oil is a threat to the economic revival of the world including India.” Imports over 85 percent of its needs. India was once Iran’s second largest customer. Iran has many benefits from crude oil. In this, the shortage of travel route reduces the cost of freight and gives a longer time for payment.
Exports have been declining since the US President Donald Trump imposed a ban on Iran in 2018. Some countries, including India, were exempted from the ban, which ended in 2019.