India looks to resume buying oil from Iran if US lifts sanctions -

New Delhi: Senior Indian officials have said that India will start importing oil from Iran once the United States withdraws sanctions imposed against Iran. Indirect talks are being held between the United States and Iran over the controversial Iranian nuclear program. During the negotiations, US state department spokesman, Ned Price, had said that the United States is willing to withdraw certain sanctions imposed against Iran. Simultaneously, the relations between India and Saudi Arabia have been somewhat strained over the oil prices. Against this background, confidence is being expressed that the oil rates will come down if oil could be purchased from Iran.

The Indian government has issued orders to the oil companies to reduce their dependency on Saudi Arabia and search for alternatives. India seems to have taken this decision because of the dispute with Saudi Arabia over oil rates. During the Coronavirus pandemic, the oil demand had slumped. This resulted in a drop in oil production. India had said that now the oil demand has increased and had appealed that the oil-producing countries should increase the oil production to ease the oil prices. But Saudi Arabia refused to pay heed to this Indian demand. Instead, the Saudi Arabian Minister gave the unsolicited advice that India should use the oil purchased while the rates were low.

After that, India started buying oil from African and other countries, reducing the oil purchase from Saudi Arabia. The reduction has gone up to 33%. In this scenario, if the United States lifts Iran sanctions, it will be a boon for India. From May 2019, it became difficult for India to purchase oil from Iran owing to the US sanctions. This also affected the bilateral relations with Iran because India was the second-largest purchaser of Iranian oil. But indications are that the relations are steadily returning to normal.

Iraq was the largest oil supplier to India in the financial year 2020-21, with Saudi Arabia and the United Arab Emirates in the second and third position. Nigeria was the fourth-largest supplier of oil to India, and the United States was the fifth.