August 29, 2018 / 11:22 AM / 3 months ago

India expects clarity on Iran oil cut after U.S. meeting: source

NEW DELHI (Reuters) - India will not completely halt Iranian oil imports and will finalize its strategy on crude purchases from Tehran after a meeting with top U.S. officials next week, a senior government official said.

FILE PHOTO: A worker holds a nozzle to pump petrol into a vehicle at a fuel station in Mumbai, India, May 21, 2018. REUTERS/Francis Mascarenhas/File Photo

U.S. Secretary of State Mike Pompeo and Defense Secretary Jim Mattis will hold high-level talks with India’s Foreign Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman on Sept. 6, in what is known as a 2+2 dialogue.

“Definitely we are not going to zero” (purchases), said the official, who has direct knowledge of India’s oil purchase policy and did not wish to be identified.

When asked if more clarity on India’s Iranian oil purchases would emerge after the dialogue, the official said “yes, that is the highest level of meeting we will have with the U.S.”

The United States is pushing all countries to halt oil imports from Iran after President Donald Trump withdrew from a 2015 deal between Iran and six world powers and ordered a re-imposition of sanctions on Tehran.

India, Iran’s top oil buyer after China, has so far not decided on the size of any cut to Iranian imports and continues to seek a waiver from the United States.

Trump has threatened that anyone trading with Iran will not do business with America.

U.S. sanctions on Iran’s energy sector are set to be re-imposed after a 180-day “wind-down period” ending on Nov. 4.

Several countries that were involved in the 2015 nuclear deal had attempted to lessen the blow of fresh sanctions on Iran, and urged their firms not to pull out.

But that has proven difficult: several European companies have cut ties with Iran, arguing they cannot risk losing their U.S. business as the sanctions deadline approaches.

India has already asked its refiners to prepare for a drastic reduction in imports of crude from Tehran from November, sources told Reuters in June.

New Delhi has so far not committed to complying fully with the new U.S. sanctions, but is prepared to cut Iran oil imports to protect its wider exposure to the U.S. financial system.

During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil, although it had to reduce imports as shipping, insurance and banking channels were choked off due to the European and U.S. sanctions.

Reporting by Nidhi Verma; Editing by Mark Potter

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