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India to reduce Iran oil imports

May 16, 2012 at 11:31 AM   |   Comments

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NEW DELHI, May 16 (UPI) -- India said it will reduce crude oil imports from Iran this year by 11.1 percent.

Indian Minister of State for Petroleum and Natural Gas RPN Singh told Parliament Tuesday the new target for imports of crude oil from Iran for 2012-13 is approximately 15.5 million tons, Press Trust of India reports.

The minister said the amount in 2011-12 was 17.44 million tons and 18.50 million tons in 2010-11.

Also Tuesday, Carlos Pascual, the U.S. special envoy and coordinator for international energy affairs, met officials in New Delhi, apparently in a follow-up to Secretary of State Hillary Clinton's visit last week in which she urged India to do "even more" to cut its oil imports from sanctions-hit Iran.

India currently imports 80 percent of its crude oil from more than 30 countries, relying on Iran for 12 percent of those imports. After Saudi Arabia, Iran is India's second-largest oil supplier.

Countries that don't take significant steps to cut back on Iranian crude oil imports face financial penalties from the U.S. government.

While the United States already has granted waivers to the sanctions for Japan and 10 European countries after they announced cuts, it has not yet included India or China.

India is the second-largest importer of Iranian crude oil after China.

In a statement to Parliament announcing the cuts, Singh signaled the reduction was not because of U.S. pressure.

"To reduce its dependence on any particular region of the world, India has been consciously trying to diversify its sources of crude oil imports to strengthen the country's energy security," Singh said.

K.C. Singh, a retired diplomat who was India's ambassador to Tehran, wondered whether India's cuts are sufficient.

"Today's announcement may be OK for the time being, but I suspect that Americans would want us to do more," he told The Washington Post.

"India has to do a tough balancing act between Iran and America. We have to ensure that our strategic engagement with the U.S. continues."

But South Asia expert Sumit Ganguly, a member of the Council on Foreign Relations, said the likelihood of Washington imposing sanctions on India is "pretty slim."

"If the U.S. imposes sanctions, I think the Indo-U.S. strategic partnership will basically fall apart," Ganguly told Indian news Website Firstpost.

A possible outcome of New Delhi's announcement of reductions of Iranian oil is that shale gas in liquefied form could be supplied from the United States.

"It is expected that the U.S. will positively consider this," an unnamed official was quoted as saying by Press Trust of India.

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