Energy situation in India may worsen as US decides to hit imports from Russia and Iran
New Delhi, Apr 16: The situation regarding LPG and other petroleum products in India is likely to worsen because of the latest two decisions of the United States (US).
One decision of the Trump Administration is to let its one-month waiver granted to India to import oil and gas from Russia to expire on April 19.
Another critical decision of the US is to apply sanctions on countries importing oil and gas from Iran.
These decisions will further choke India’s energy imports, which got a little breather over the last one month as it received supplies from Russia and Iran.
Last week, India received its first Iranian oil shipment in seven years in the form of 4 million barrels aboard two vessels.
“We will not be renewing the general licence on Russian oil and Iranian oil. That was oil that was on the water prior to March 11th. All that has been used,” US Treasury Secretary Scott Bessent told a media conference in Washington.
He went on to add: “We have told countries that if you are buying Iranian oil, that if Iranian money is sitting in your banks, we are now willing to apply secondary sanctions.”
Waiver of Sanctions:
On March 6, the US temporarily eased sanctions to allow India to import Russian oil that was already stranded at sea. A week later, this relaxation was extended to other countries.
Similarly, on March 20, the US allowed the delivery and sale of Iranian-origin crude oil and petroleum products that had already been loaded onto vessels.
These decisions of the Trump Administration come amidst hardening of positions by the US and Iran regarding the Strait of Hormuz.
The blockade of the Strait of Hormuz enforced by Iran since the war began on February 28 with the US and Israel launching attacks has severely disrupted India’s imports of energy from West Asia.
The decision to end the waiver, along with the threat of fresh sanctions, particularly on Iranian oil, is part of the US strategy to mount pressure on Tehran to sign a deal.
“Iranians should know that this is going to be the financial equivalent of what we saw in the kinetic activities,” Bessent added.
India has traditionally been importing a substantial amount of oil and gas from West Asian countries as well as Russia.
Meanwhile, amidst hopes of the early next round of talks between the US and Iran, oil prices declined in early trading today.
The White House last night voiced optimism about reaching an agreement to end the conflict with Iran, while warning that economic pressure on Tehran would intensify if it remains unyielding.
