For a second time, US says ‘no’ to India on crude oil

PW Bureau

Oil is owned by private people, so the government cannot force people to make concessionary price, US Commerce Secretary Wilbur Ross said

New Delhi: The United States said categorically on Monday that it cannot ensure availability of its crude oil at concessional rates to India to make up for the cheaper Iranian oil that is now off the shelf. “Oil is owned by private people, so the government cannot force people to make concessionary price,” US Commerce Secretary Wilbur Ross, who is in India to participate in a trade forum, said.

‘US working with other nations to ensure oil supply’

After a meeting with Finance Minister Arun Jaitley, Ross said, “Iran is a problem, if you have seen recent terrorism incidents, and we should be doing whatever we can against terrorism.”

US Ambassador to India Kenneth Juster said, “The US working with other countries, including Saudi Arabia, to ensure an adequate supply of oil.”

The context

India stopped importing crude oil from Iran this month after the US refused to extend the waiver granted to eight countries last month. The sanctions have been imposed by the US unilaterally on Iran in order to force Tehran to give up its nuclear programme.

Why Iranian oil matters for India?

India is the second-biggest buyer of Iranian crude oil after China. It bought some 24 million tonne of crude oil from Iran in the fiscal ended March 31. Iranian oil makes for a cheaper and more lucrative option for Indian refiners because the Persian Gulf nation provides 60 days of credit for purchases, a term that is not available to India from other substitutes of Iranian crude like Saudi Arabia, Kuwait, Iraq, Nigeria and the US.

Iran also provides India insurance cover when on oil shipments in transit, another relaxation offered by Iran that is not provided by other oil-producing countries.