To ensure India isn’t adversely affected by the sanctions on Iran oil supplies, the US might consider selling oil and gas from its reserves at concessional rates to India, reports Mint.
Indian officials and the visiting US Principal Deputy Assistant Secretary of State for South and Central Asia, Alice Wells, discussed on Tuesday (23 April) on how India could avoid facing an energy crisis after 2 May when Iran sanctions come into force.
Iran was one of India’s biggest oil suppliers, account for almost 10 per cent of its petroleum imports. India currently 80 per cent of its total oil requirements from various countries.
Though India could increase its oil purchases from traditional suppliers like UAE and Saudi Arabia, it is highly unlikely that this increase can compensate for Iran losses. This is because the Oil cartel OPEC of which Saudi and UAE are a part of, have agreed to cut production to shore up world crude oil prices.
Diversity Is The Key
Hence India will have to strike a deal with non-traditional sources like the US, which is currently experiencing a boom in shale oil production. This deal would have provide oil to India at prices that are not different from the previous Iranian prices.
If the prices are higher, it could trigger an inflation crisis in the country.
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