US Lifting Sanctions Waiver For Iranian Oil Imports May Not Impact Supplies As India Lines Up Alternate Sources

India, the second biggest purchaser of Iranian oil, has lined up alternate sources to make up for the expected shortfall in supplies after United States’ decision to not give waiver from its sanctions for buying oil from Iran, Mint has reported.

The Trump administration on Monday (22 April) decided not to renew waiver that let countries like India buy Iranian oil without facing US sanctions.

"Our crude sources are wide. We have alternate sources lined up to make up for any shortfall," a top source was quoted in the report as saying.

Last year in November, the US had granted a six-month waiver from sanctions to eight countries - India, China, Japan, South Korea, Taiwan, Turkey, Italy and Greece - after President Trump withdrew from the 2015 nuclear deal between Iran and world powers. However, US put a condition before these exempted countries that they would reduce their purchases of Iranian oil.

India, which is the second biggest buyer of Iranian oil after China, had agreed to restrict its monthly purchase to 1.25 million tonne, down from 22.6 million tonne bought in 2017-18 financial year.

"We have optional volumes (over and above the term contracts) from a number of supplier which we can exercise to make up for any shortfall from Iran," the source said, as reported by Mint. "We can also go to the spot (or current) market to source crude," the source added.

"As far as Indian Oil is concerned, supplies will not be a problem. We have already lined up alternate sources," he said adding the impact of the US decision may reflect on global oil prices which may temporarily go up.