Washington continues to aim for zeroing out Tehran’s exports. After meeting with India’s foreign and defense ministers in New Delhi, Pompeo said, “We will consider waivers where appropriate, but … it is our expectation that the purchases of Iranian crude oil will go to zero from every country, or sanctions will be imposed.”
India is one of Iran’s top oil customers. Its post-sanctions import plans will play a major role in the drop of Iranian exports in the coming months. According to an S&P Global Platts analysis on Thursday, India’s imports from Iran fell to 428,710 b/d in August, a plunge of 65% from July.
With buyers sourcing alternative supplies and halting their loadings to allow time to complete deliveries before the sanctions take effect, Iran’s exports have already begun falling. Platts Analytics expect a reduction of Iran’s exports of crude and condensates by 1.44 million b/d by November when the sanctions go into effect, compared with April levels.
US oil exports could be a solution for some countries as they sever ties with Iran, Pompeo said, according to a Department of State transcript. “Many countries are in a place where they — it takes a little bit of time to unwind, and we’ll work with them, I am sure, to find an outcome that makes sense,” he was quoted as saying.
“And from whence they purchase the other crude oil, we’re happy to see if it’s American products that are able to deliver for them,” Pompeo added. “I think that’d be a great outcome.”Locking in low prices, India recently signed its first term contract for US crude exports.
David Goldwyn, president of Goldwyn Strategies in Washington said, “India has already cut back from historically high levels of imports from Iran” The State Department’s top energy diplomat in 2009-2011 added, “I expect they will seek a graduated cutback, linked to global price levels.
Given disruptions in Venezuela, Nigeria and periodically in Iraq and Libya, Secretary Pompeo will have to share what assurances he has gotten from Saudi Arabia about the future of the Vienna Alliance to persuade India to make sharp reductions in November.”
Behind the US and China, India is the world’s third-biggest energy consumer. The country must meet more than 80% of its crude requirements through imports. Its top crude suppliers are Iraq, Saudi Arabia, and Iran.
“The decision on Iranian imports will have to be taken independently, although the US sanctions will cut import volumes from Iran after November,” said one official at the Indian oil ministry.
The summit promoted bilateral ties, said the Indian Foreign Minister Sushma Swaraj, but he did not comment on the country’s import plans after US sanctions snap back. However, another Indian oil ministry official said, “Both sides decided to carry forward discussion on India’s engagement on Iranian oil imports.”