India hopes for US sanctions waiver after cutting Iran oil imports

India hopes to secure a waiver from US sanctions on Iran before they take effect on November 4, as it had significantly cut Iranian oil imports before the deadline, officials said on Monday.

The United States is imposing new sanctions on Iran’s oil industry after Washington withdrew from a nuclear deal between Tehran and other global powers.

Washington said on Friday it was considering waivers for nations that were reducing imports of Iranian oil.

The announcement, the first indication Washington was considering such waivers, followed a Reuters report that India planned to lift some Iranian oil in November although it has been cutting back on Iranian imports in recent months.

India has cut back on Iranian crude imports in recent months, but plans to lift some oil in November

Indian Oil Minister Dharmendra Pradhan told reporters that New Delhi was discussing the issue of a waiver “with all the authorities concerned”.

“We have to fulfill all our domestic requirements,” Pradhan said, confirming the plan to buy some Iranian crude after US sanctions kick in.

India, Iran’s No.2 oil client behind China, does not recognise the US sanctions. But New Delhi needs a waiver to ensure its wider exposure to the US financial system is not affected.

India has been curtailing oil imports from Iran since September. India would lift 9 million barrels of Iranian oil in November, equivalent to about 300,0000 barrels per day (bpd), compared to an average of about 658,000 bpd from April to August, according to data available with Reuters.

“It has been quite a tough process to negotiate,” said Sanjay Sudhir, a joint secretary handling international cooperation in the Oil Ministry, in reference to efforts to diversify supplies and reduce Iranian imports.

“We were trying to balance our relationship with the US and Iran, at the same time keeping our energy and security interest in mind,” he added.

India had diversified its oil supplies to cushion the impact of sanctions, he said.

He said Indian refiners had started importing oil from the United States but purchases were constrained by US infrastructure. “As US infrastructure improves, India has a potential to lift more,” he said.

US Secretary of State Mike Pompeo said in New Delhi that the US administration acknowledged some buyers of Iranian oil would take a “little bit of time” to unwind their trade with Iran.

“We expect the global leadership to acknowledge India’s need for Iran’s oil,” Pradhan said, adding that he wanted major oil producers like Saudi Arabia to raise production.

Pradhan said he had spoken to Saudi Oil Minister Khalid al-Falih two day earlier about the June decision by OPEC and major oil producers to add 1 million bpd to the oil market.

“Oil should not only be priced from a producers’ point of view consumers interest should also be taken care of,” he said.

Some Indian refiners recently made payments for Iranian oil in rupees, and could use the same mechanism in future to settle trade with Tehran if no other alternatives were found, state-run Indian Oil Company (IOC) Chairman Sanjiv Singh said.