Indian oil refiners will purchase an estimated 9 million barrels of oil from Iran in November despite U.S. sanctions taking effect on Nov. 4.
India, which is the world's third largest oil importer and Iran's major client after China, will proceed with the purchase of Iranian oil, risking its long strategic alliance with Washington.
India is in a difficult position. It should maintain its warm diplomatic ties with Iran. The two countries are in the middle of the construction of the Chabahar, a strategic trading port that will be operational by 2019.
At the same time, India is a long-time U.S. ally. The two nations have long been promoting each other's strategic interests across different bilateral relations.
According to sources who spoke with Reuters on condition of anonymity, various Indian Oil Corp will buy 6 million barrels of Iranian oil while Petrochemicals Ltd will purchase 3 million barrels - a total of 9 million barrels. The amount is actually reduced compared to the 10 millions of barrels India planned of purchasing from Iran this month.
Washington has decided to impose new sanctions on Iranian oil exports in an attempt to stop its engagement in the war in Syria and Iraq. The Trump administration has also been insisted for Iran to re-negotiate its ballistic missile program.
The current behavior of India is not actually surprising given that it behaved the same way when the United States imposed sanctions on Iran from 2012 to 2015. At the time, India had also continued buying Iranian oil. To respect the U.S. sanctions, however, it significantly reduced its oil import from Iran at the time.
India has also risked its relations with Washington when it went ahead with its purchase of Russian weapons amounting to $5 billion. Specifically, the deal involved India's acquisition of the high-powered S-400 missile defense system. The deal was closed during a bilateral meeting in New Delhi on Oct. 5. The meeting was attended by controversial Russian President Vladimir Putin according to CNN.
India's purchase of the Russian weapons has also made itself vulnerable to U.S. sanctions under the Countering America's Adversaries Through Sanctions Act assigned by U.S. President Donald Trump.
On the other hand, India could simply be balancing its act, carefully, to safeguard relationship with both countries. In September, U.S. oil shipments to India decreased by 75 percent, Reuters noted in a separate report. Specifically, the oil shipments to India slumped to 84,000 barrels per day last month compared to 347,000 barrels per day in June. Interestingly, India has also been cutting its purchase of Iranian oil since June.
