Iran becomes India’s No. 2 oil supplier

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: Sactions on Iran and its impact on India


News

Surge in oil imports from Iran

  1. Iran was the second-biggest oil supplier to Indian state refiners between April and June
  2. India is Iran’s top oil client after China

Import curbs last year

  1. State refiners, accounting for about 60% of India’s 5 million bpd refining capacity, had curbed imports from Iran last year
  2. This was done in protest against Tehran’s move to grant development rights for the giant Farzad B gas field to other parties

Why this surge now?

  1. Iran has offered almost free shipping and extended credit period on oil sales

Impact of sanctions on Iran

  1. India and other major buyers of Iranian oil are under pressure to cut imports from the country after Washington in May withdrew from a 2005 nuclear deal with Tehran and decided to reimpose sanctions on the OPEC member
  2. The first set of sanctions will take effect on August 6 and the rest, notably in the petroleum sector, following a 180-day ”wind-down period” ending November 4
  3. This might force India to look for other alternatives which may result in increased oil prices
Foreign Policy Watch: India-Iran
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