India set to suffer as US red-flags Iran oil imports

Washington: In a move that could have implications on India's energy security, US President Donald Trump on Monday decided not to grant sanctions exemptions to any oil customers of Iran, further squeezing Tehran's top export commodity.

"President Donald J. Trump has decided not to reissue Significant Reduction Exceptions (SREs) when they expire in early May.

This decision is intended to bring Iran's oil exports to zero, denying the regime its principal source of revenue," White House Press Secretary Sarah Sanders said.

The US re-imposed sanctions on Iran last November, after President Trump pulled out of the landmark 2015 Iran nuclear deal. The US' move which is seen as an escalation of President Trump administration's "maximum pressure" on Iran comes after it last year gave temporary 180-days waiver to eight countries, including India, China, Turkey and Japan among others.

As a result of this decision all countries including India would have to bring down its import of oil from Iran by May 2. Greece, Italy, Japan, South Korea and Taiwan have already heavily reduced their oil imports from Iran.

Iran is India's third-largest oil supplier behind Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil during April 2017 and January 2018 (first 10 months of 2017-18 fiscal).

The US, Saudi Arabia, and the United Arab Emirates, three of the world's great energy producers, along with its friends and allies, are committed to ensuring that global oil markets remain adequately supplied, Sanders said.

"We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market," she said.

In a statement, Sanders said the Trump Administration and its allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime's destabilising activity threatening the United States, its partners and allies, and security in the Middle East.

"The President's decision to eliminate all SREs follows the designation of the Islamic Revolutionary Guard Corps as a Foreign Terrorist Organisation, demonstrating the US' commitment to disrupting Iran's terror network and changing the regime's malign behaviour.

We welcome the support of our friends and allies for this effort," Sanders said. China and India are currently the largest importers of Iranian oil.

If they don't go along with Trump's demands, that could cause tensions in both bilateral relationships and spill over into other issues, like trade, the Washington Post reported.