US may sanction India for buying Iranian oil

US President Barack Obama may impose sanctions on India if it fails to trim down its purchases of Iranian oil.

Zeenews Bureau

Washington: US President Barack Obama may impose sanctions on India if it fails to trim down its purchases of Iranian oil.

Speaking on condition of anonymity, Obama administration officials said on Wednesday that the US President could impose penalties as early as June 28.

A new US law, which targets payments made for oil through Iran`s central bank, applies in any country that fails to make a "significant" reduction in its Iranian crude oil purchases during the first half of 2012, said Bloomberg news agency.

In an interview, Avi Jorisch, a former US Treasury Department official, said: "Given the level of trade, and in particular oil, between Iran and India, targeting an Indian entity that facilitates Iran`s access to the international financial market should be top of mind for the US Treasury.”

"If India fails to cut Iranian imports sufficiently, Obama may be compelled to bar access to the US banking system for any Indian bank processing oil payments through Iran`s central bank," the unnamed US officials were quoted as saying.

The new US law targeting Iranian petroleum transactions doesn`t specify by what percentage a nation must reduce its Iranian oil imports to qualify for an exemption from sanctions.

But US officials cited by Bloomberg said they are looking for cuts of around 15 percent in volume, though they might consider whether buyers have extracted significant price discounts, thereby depriving Iran of revenue.

In the first six months of last year, India purchased an average of 328,000 barrels a day of Iranian crude. According to the US Energy Information Administration, India was on the third rank on buyers’ list, behind China and Japan and ahead of South Korea. Iran is the No 2 producer in the Organization of Petroleum Exporting Countries.

Iran cut off from global financial system

Dozens of Iranian banks were blocked from doing business with much of the world as the West tightens the financial screws on a country it wants to prevent from developing nuclear weapons.

The Belgium-based company that facilitates most international bank transfers on Thursday took the unprecedented step of blocking 30 Iranian banks from using its service. The move is likely to hurt Iran`s all-important oil industry and make it difficult for citizens to receive money from relatives living abroad.

The move by the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, is part of a broader effort by Western nations to isolate Iran financially and force it to demonstrate that it is not trying to develop nuclear weapons. Iran says that its nuclear program is for peaceful purposes only, but officials in many other countries believe otherwise.

(With Agencies’ inputs)


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