New Delhi squeezed by Iranian sanctions

Jan. 10, 2012 at 9:22 AM
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NEW DELHI, Jan. 10 (UPI) -- India might be up against the wall if Turkish banks decide to stop serving as the middle man for New Delhi's oil purchases from Iran, an analyst said.

New Delhi pays about $1 billion per month through Turkish channels for the estimated 370,000 barrels per day of Iranian crude, a major oil supplier to India and the world's fourth-largest oil producer.

Western pressure on Tehran exerted as punishment for a controversial nuclear program targets banking channels Iran uses to process oil payments, which could make it difficult for Ankara to keep serving as the intermediary.

Praveen Kumar, an oil and gas analyst at FACTS Global Energy in Singapore, told Bloomberg News New Delhi was considering working through Moscow on crude payments if Ankara backs away.

"Russia has stayed away from sanctioning Iran, so this route might just work for India," he said.

The European Union by the end of the month plans to discuss a tougher line on Iran, a move that could include sanctions on crude oil imports.

Kumar said New Delhi is running out of options.

"This is a serious issue," he said. "India doesn't seem to have a Plan B at the moment."

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