Daily Management Review

Iran is looking for allies


Having faced the threat of a significant reduction in the flow of petrodollars due to US sanctions, Iran set to look for allies. So far, the country is still supported by the EU and European countries, which continue their attempts to maintain an agreement on the Iranian nuclear program despite pressure from Washington.

The official adviser and representative of the German Social Democratic Party (SPD) on foreign policy issues at the Foreign Ministry, Niels Annen, is one of the supporters of the Joint Comprehensive Plan of Action on the Iranian nuclear program, often referred to simply as an agreement on Iran's nuclear program. He said recently in an interview with the Indian news portal News18 that the pressure the Americans are exerting on its allies to force them to abandon Iranian oil is "annoying." It is not accidental that India is chosen for talking about Iranian oil. Delhi is one of the top three importers of oil from Iran. Therefore, its attitude to American sanctions against Iran for Tehran is very important.

"This [decision on compliance or non-compliance with US sanctions] should be India's sovereign decision," said the famous German politician. "I am not an Iranian traveling salesman and do not defend Iran's trade interests, but I had the impression that India wants to continue buying oil from Tehran".

Niels Annen believes that it is necessary to develop a financial mechanism to overcome US sanctions. France already has proposals on this issue.

So far, it is not very clear whether Minister Annen will achieve his goal to persuade Delhi not to reduce the purchases of Iranian oil. The fact is that the US pressure is not only "irritating." It is very strong and not all countries can withstand it. Despite the fact that the final decision on Iranian oil in Delhi has not yet been taken, there is an impression that of the three largest buyers of Iranian oil, India is ready to abide the American sanctions.

It would seem on the one hand that Tehran has nothing to fear from India. India's oil and natural gas minister Dharmendra Pradhan said on Monday, July 23 that in the second quarter, Iran bypassed Saudi Arabia and came in second place among oil suppliers for Delhi. Iraq keeps occupying the first place. In April-June, the Indians bought 5.22 million tons of oil from the KSA, 5.6 million tons from Iran, and 7.27 million tons from Iraq.

Despite this, the supply of Iranian oil to India will decrease in annual terms this year. The financial year in India lasts from April 1 to March 30. So, in the year ended March 30, 2018, India bought 9.8 million tons of oil from Iran, and 13.04 million tons - in 2016-17, i.e. almost a quarter more. The import of oil from Iraq for the year increased by almost 20%: from 24.79 million tons in 2016-17 to 29.66 in 2017-18.

In May, the government of Modi declared that it did not intend to submit to US sanctions against Iran, because it recognizes only UN sanctions, but then changed its tone. A few weeks ago, the US representative to the UN, Nikki Haley, visited Delhi. The day after her departure, the Indian Ministry of Oil ordered to prepare for a sharp decline or even a total refusal of Iranian oil.

The situation became even more complicated in mid-June, when the largest Indian bank informed Indian refineries of the termination of all operations related to the payment of Iranian oil since November, that is, the time of entry into force of US sanctions against Iran.

In June, the large oil refiner Nayara Energy began to reduce purchases of Iranian oil and intends to reduce them by half. Reliance Industries, another large Indian company engaged in oil refining and owning, incidentally, the world's largest oil refinery hub, is rumored to plan to stop buying oil from Tehran in October.

"We have special strategic relations with the United States," Dharmendra Pradhan tried to explain Delhi's hesitation in an interview with Indian media. "We have historical, cultural and civilizational relations with Iran. In addition, Iran is an important factor in India and Afghanistan because of its geographical proximity. We are connected with both countries by economic interests. The government will thoroughly study the issue and make a well-considered decision." 

The government of India is obviously waiting for the end of the negotiations between the European Union and Iran, weighing all sorts of options and meeting with the parties concerned. Last week, a delegation from Iran visited Delhi, urging Indians not to reduce purchases of Iranian oil. The next day, the Iranians were replaced by US diplomats, who naturally tried to convince the interlocutors to replace Iranian oil with oil from Iraq and Saudi Arabia. A decision of the government of Mody must be accepted no later than October.

source: news18.com