Indian saga of Iranian oil

Since opening of diplomatic relationship on March 15, 1950 India–Iran trade blossomed to the extent that that by 2000 Iranian crude became the mainstay in Indian oil refineries. Pointedly 40% of refined oil used within India originated from Iran. The comfort zone was breached when Donald Trump bomb shelled India using oil as the chosen weapon of geoeconomics. 

Scorning the Iran Nuclear Agreement commonly known by its acronym JCPOA he quit from it on May 8, 2018 bringing on its wake the imposition of sanctions on buyers of Iranian crude worldwide. A window of waiver was introduced to support countries to progressively reduce the purchase quantum to zero. India was in that favoured list as Trump wished to rope in India for his strategic objective of Isolating the trio China, Russia and Iran. However, this sanction waiver window was short lived. Suddenly Trump decreed that no more renewal would be given for waiver to India past May 2, 2019. 

For India it was a big surprise. India understood the transactional relationship America follows where there is always quid for quo. India under estimated the grit of trump in thwarting such a mutually beneficial relationship. Significantly, India overestimated her stature as a pivot in the so called Indo Pacific strategy. The misunderstanding occurred because the name India was deliberately chosen by US policymakers to pump up Indian ego and position her as counterweight to the growing geoeconomics power of China.

Another miscalculation on the side of Indian elites was, by citing lack of waiver they can jolly well drop Iran and orient much towards Saudi- Emirates duo. For Iran next to China, India was the largest buyer amounting to close upon 27 million tons of crude. India imports nearly 85% of her oil needs from abroad. The suppliers list other than Iran included Iraq, Saudi Arabia and surprisingly USA as well. Successive incidents in US-Iran relationship such as coveted assassination of Iranian leaders and scientists went unnoticed by India to the chagrin of Iran.

But for all the rigmarole of quitting JCPOA, China continued to buy Iranian crude directly as well as indirectly via third parties. While India despite her vainglory of being big power shaping destinies of countries washed by Indian Ocean wanted to display subservience to America and be on the good books of US forever, stopped oil imports forthwith without evaluating geoeconomics implications. By this time China – Iran 25 year co-operation agreement was initialled. Iran would supply crudes discount to market to China.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist