US warns India to cut Iran oil import

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US warns India to cut Iran oil import

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US could impose sanctions on India if the country fails to meet US demand to cut Iran oil imports.

16 March,2012 06:56 am

As the US is trying to deprive Tehran of its leading source of revenue, India continues to resist US pressure. President Obama could be forced to bar access to the US banking system for any Indian bank processing oil payments through the Iranian Central Bank, US officials said.India, one of the most important US allies in Asia, has rebelled against American pressure to cut oil imports. Washington followed by the EU imposed sanctions on Tehran in an attempt to force the Islamic republic to give up its nuclear programme.Last year India was the fourth largest buyer of Iranian oil behind China, the EU (being the second largest buyer collectively) and Japan. It purchases around 12 per cent of all its crude from IRI (a transaction that is worth around $12 billion each year) and it still hasn’t asked its refiners to stop purchasing crude.The news on possible US sanctions against India come after the International Energy Agency released a report on Wednesday, saying India and South Korea have sharply increased oil purchases from Iran since January.Earlier, India and China proposed Iran to switch from the dollar to gold in bilateral trade, since the US and EU have issued unilateral sanctions against the Iranian oil industry and financial institutions. The sanctions would ban any bank involved in the oil trade with Iran from dealing with American and European counterparts.The EU embargo on Iranian oil will come into force on July 1. This makes some US officials believe President Obama may be compelled to impose penalties on India as early as June 28.India imports nearly 80 per cent of its oil needs, and oil accounts for nearly a third of the countrys imports. Its demand for oil remains high, making it hard for the country to diversify its suppliers.