News ID: 253096
Published: 0223 GMT May 20, 2019

Iran hopes new India gov’t will resume oil purchases: Envoy

Iran hopes new India gov’t will resume oil purchases: Envoy

India’s sudden halting of crude oil imports came as a shock for long-standing strategic partner Iran, but Tehran believes purchases will resume as soon as a new government comes to office in New Delhi, Iranian Ambassador to India Ali Chegeni told ThePrint.

“The Iranian government expects India to expand relations with Iran in all aspects, especially in economic fields, including oil purchases, once a new government comes to power,” Chegeni said.

Official sources told ThePrint that Iranian Foreign Minister Mohammad Javad Zarif was assured by External Affairs Minister Sushma Swaraj during their meeting last week that a decision on oil purchases will be taken when a new government is set up.

“The foreign minister’s visit was crucial at this juncture as he wanted to brief India where it stands as far as the JCPOA is concerned,” Chegeni said.

Chegeni said Iran had just asked the other signatories of the deal – China, Britain, Russia, France and Germany – to step up.

The other signatories of the deal have been critical of the US’ withdrawal.

Chegeni said Iran had clearly told India that it had not withdrawn from the deal – it had been conveyed to New Delhi, he added, that Iran had warned Europe it had 60 days, in accordance with the JCPOA, to prevent US sanctions from impacting the country’s banking and oil sectors.

New Delhi, which imports about 80 percent of its entire crude requirement, was Iran’s second-largest buyer of oil, after China, when the US deadline kicked in, according to the Ministry of Petroleum and Natural Gas.

At the time purchase was halted, India was buying over 300,000 barrels per day from Iran.

Meanwhile, India has been holding negotiations with the US to allow it to import the remaining shipments of Iranian oil, for which contracts were signed earlier.

“We expect India to consider Iran a friend, as we have been in the past. Iran and India’s energy relationship is based on accessibility, sustainability, security and reliability,” Chegeni said.

“We used to be neighbors until 1947, and we are also neighbors through the sea. Let us not forget Iran was the first country to sell oil to India in exchange for rupees that was based on mutual benefit,” he added.

 

Joining INSTEX

European nations looking to bypass US sanctions on Iran oil purchases are working on a non-dollar, barter payment channel – INSTEX or the Instrument in Support of Trade Exchanges – to continue trade with Iran.

Iran has suggested that India join INSTEX, but sources said New Delhi had not made a decision on it yet.

Meanwhile, the European Union is yet to operationalize INSTEX, a delay which has irked Iran, leading President Hassan Rouhani to threaten withdrawal from the deal this month.

“We hope Europe speeds up the work on INSTEX and injects money in it,” Chegeni said.

“In its first phase, INSTEX will facilitate trade of humanitarian goods such as medicine, food and medical devices, but it will later be expanded to cover other areas of trade, including Iran’s oil.”

 

Chabahar port project

While Indian oil imports from Iran have come down to zero, Tehran expects New Delhi to at least speed up work on developing the Chabahar port, which is located in the country’s Sistan-Baluchestan Province.

A flagship joint endeavor, Chabahar is believed to hold immense strategic significance for India as it will allow the country direct access to Afghanistan and Central Asia, for which New Delhi has to currently depend on Pakistan.

“Our ties with India go beyond oil. We have economic ties across many sectors. The impact of US sanctions will not be felt on the Chabahar project,” Chegeni said, “But it needs to speed up work there.”

The first phase of the port was inaugurated in December 2017. Apart from developing the port, the Chabahar project also entails the creation of a rail link from Chabahar to Zahedan within Iran.

While a feasibility study on the rail link was completed two years ago by the Indian public sector company, IRCON, work is yet to begin, the envoy said.

 

Oil will find a way to flow

The ambassador said that while sanctions had proved to be difficult for its economy, Iran will find a way to sell its oil.

“Just like water, oil will find a way to flow,” Ambassador Chegeni said.

“Yes, we may have some difficulties but we will continue to do business, which is our legitimate right,” he said.

 

   
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