India Iran Oil | Latest Burning Issues

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Table of Contents

INDIA GOING ALL OUT AGAINST CAATSA

Countering America’s Adversaries Through Sanctions Act The bill was passed during the 115th Congress, 98–2 in the Senate. On August 2, 2017, President Donald Trump signed it into law while issuing two statements simultaneously that he believed the legislation was “seriously flawed“ Iran, North Korea, and Russia.

WHY CAN THE US IMPOSE ECONOMIC SANCTIONS ON OTHER COUNTRIES?

Because the US and it’s very close allies (Canada, the U.K., Australia and New Zealand) as well as those nations who utterly depend on the US for their security (Japan, South Korea, Singapore, Saudi Arabia, UAE, Germany, Italy, Poland, Netherlands, France, Spain, Turkey, Israel, Kuwait, Philippines) as well as those who do a lot of business with the US and who would be made to suffer extraordinarily (Mexico, Colombia, Chile, Malaysia, Thailand) account for all the banking power on the planet

WHY CAN THE US IMPOSE ECONOMIC SANCTIONS ON OTHER COUNTRIES?

TRUMP AGAINST IRAN – REASONS

Trump’s animosity towards Iran is based on a particular view of its interests in West Asia. Its two main allies in the region are Israel and the Saudi Arabia-led Gulf alliance. Israel is, of course, a prohibited area for both strategic and deeply etched ideological reasons. No US administration will ever do anything that even remotely risks alienating Tel Aviv.

ISRAEL’S STRATEGIC LOCATION

AMERICAN EVANGELICALS LOVE ISRAEL

PROBLEM WITH SANCTIONS

They are unilateral and have not been routed through the United Nations (UN).

WHY IRAN MATTERS TO INDIA

Chabahar Port
Oil (discounted rates)
A strategic partner

INDIA’S BRAVE MOVE

India Set To Buy Iranian Oil In November Despite U.S. Sanctions India Set To Buy
India will buy a total of 9 million barrels of oil from Iran in November
India is Iran’s second-largest single oil customer after China and was expected to cut back on Iranian oil purchases, but unlikely to cut off completely the cheap Iranian oil that is suitable for its refineries.

WHY IS IT BIG?

US sanctions against Iran kick in from November 4, which will block payment routes. Currently, India pays its third largest oil supplier in euros using European banking channels. These channels would get blocked from November. Oil refiners such as state-owned IOC and MRPL could use UCO Bank or IDBI Bank to route oil payments to Iran

HOWEVER

India had planned to import about 25 million tonnes of crude oil from Iran in the current fiscal, up from 22.6 million tonnes imported in 2017-18. But the actual volumes imported may be far less as companies like Reliance Industries have totally stopped buying oil from Iran and others too are scaling it down in hope of winning a sanction waiver from the US.
Nayara Energy, formerly Essar Oil, too is stopping import from Iran.

WHY IRANIAN OIL IS SO GOOD?

Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 60 days of credit for purchases, terms not available from suppliers of substitute crudes – – Saudi Arabia, Kuwait, Iraq, Nigeria, and the US.

WHY IRANIAN OIL IS SO GOOD?

Besides blocking of banking channels from November, the absence of payment mechanism may pose a challenge to the transportation of the oil as Iranian crude is bought on a CIF basis and shipped on Iranian tankers.
Under Cost, Insurance and Freight (CIF) mode of shipping, the seller assumes the responsibility of transportation and insurance. The liability and costs associated with successful transit are paid by the seller until the goods are received by the buyer