India ignores US call for economic freeze, opens up Iran oil strategy

[sob]

Venezuela is coming up as an alternate supplier to India. Reliance is the largest crude oil importer from India, did not import crude from Iran in 2011 while it has started importing from Venezuela. Similarly IOC also does not import crude from Iran. Essar, HP and BP import crude from Iran.

It is not that without crude from Iran we will have difficulty. Very large quantities of crude being refined by Reliance and Essar is for export and not for domestic requirement. And in this if Reliance is not sourcing from Iran, in times of need the o/p of Reliance can be diverted from the export market to the domestic market.

Very interesting figures from Reliance Industries:

In FY 2011: demand for Petroleum Products in India 134.4 MMT
In FY 2011: Refining Capacity in India 184.11 MMT
Source: Petroleum Refining and Marketing :: Reliance Industries Limited.

All our refineries are on full production today, so even if reduce the capacity by 20% ( to take care of Iran import) we still will be a net exporter of petro products.

So if required to stop imports from Iran, India will not be affected even 1%.

 

[The Messiah]

India to embrace Iran in staving off US and European sanctions

India plans to offer Iranian central bank BMJI the facility to use its rupee accounts with UCO Bank not just to offset Indian exports but to fund Iranian imports from third countries.

New Delhi's plan B (as proposed to the Cabinet Committee on Security today) plans to step up India's exports, including project exports, to Iran with an 'Oil for Projects' scheme to sustain Iranian crude oil supplies in the face of stringent US and EU sanctions.

"The objective is to put in place a system so that Indian exporters, including project exporters, could be paid from the Indian rupee accounts held by BMJI directly or through rupee accounts held by Iranian banks in Indian banks," says the proposal.

The prime strategy is to increase India's exports through "positive steps relating to extending the Export Credit Guarantee Corp cover for Indian exports to Iran and to identify large projects that could be commissioned in Iran as project exports".

The projects identified are in mining, fertilizer, food processing, pharma and automobile projects that are not currently sanctioned as well as setting up an SEZ in Iran, developing the Chabahar port and building rail network for access to Afghanistan and Central Asia.

Investments by Indian firms could be in consortium with Russian, Chinese or Kuwaiti companies to make it hard for the US or the EU to single out a country or company. A second option is to create new corporate entities that do not have any financial exposure in the US or EU so that they are insulated from any retaliation.

The delegation to Iran, which leaves on January 16, has also been given the mandate "to explore the possibility of using the rupee accounts held by Iran in India to fund Iranian imports from third countries, subject to suitable verification mechanism" in line with what Japan and South Korea follow.

To that end, the team would advocate for an increase in the rupee account limit to 100 per cent of Iranian earnings from the current 20 per cent to buffer the rupee kitty, and allowing two non-sanctioned Iranian banks to open rupee accounts with the UCO Bank.

Also, the Reserve Bank of India has been given the mandate "to facilitate, in discussion with BMJI, investment by the Iranian central bank in Government of India securities within its limit of $1 billion allowed for its UCO Bank account".

The present strategy relies heavily on the outcome of the Committee of Secretaries (CoS) meeting held by National Security Advisor in July 2010 that proposed 'creative mechanisms' to insulate Indian firms from the adverse impact of US sanctions.

Based on a Ministry of External Affairs paper "International Sanctions on Iran and Way Forward for India-Iran Relations", the CoS decided that economic engagement with Iran was necessary not just to promote energy security, connectivity and opening of new markets but also to ensure that India did not leave the Iranian space for China to enlarge its presence.

India has until last week bought 11.64 million tonnes of crude oil from Iran. It has paid off $9.08 billion and has to pay $3.59 billion of which only $107.62 million is "due but not paid".

Crude strategy

* Plans to offer Iranian central bank the facility to use its rupee accounts with UCO Bank

* Employ diplomatic efforts to open and operationalise bank accounts of oil companies with Russia's Gazprombank and South Korea's Woori Bank

* Diplomatic efforts to ensure that existing payment channel through Turkiye Halk Bankasi remains open

India to embrace Iran in staving off US and European sanctions - Indian Express

 

[sob]

Just a little correction, our relations with Iran were quite bad before the Islamic revolution. Iran under the Shah was an ally of the US who came to power in a CIA backed coup in 1950s.

Since then Iran and Pakistan had close military ties as both were on the same side during the Cold War. During the 1965, and 1971 wars, Iran even provided US weapons and fighter jets to Pakistan something that no other country other than the US and China have done.

After the Shah was ousted, the most significant issue was preventing sanctions on India from the UN Human Rights council on the Kashmir issue in the 1990s and co-ordinating the Northern Alliance startegy in Afghanistan with us all done after the Islamic revolution period.

Under Indira Gandhi we had good relations with most of the leftist secular regimes in the Arab world like Egypt, Iraq, Syria and even the Palestinian Authority. While the GCC, Iran, Jordan e.t.c. belonged to the "other bloc"

IIRC correctly the Shah during the 70s even had offered Naval ships to Pakistan in case of war with India.

Indo-Iranian relations are all to do with realpolitik and shared mutual interests. Neither are they doing any favour to us and nor are we doing any favour to them.This is something that has to be borne in mind when we have to take a decision. Decision cannot be based on a desire to cook a snook at Uncle Sam. It is time we grow up as a Nation.

 

[The Messiah]

IIRC correctly the Shah during the 70s even had offered Naval ships to Pakistan in case of war with India.

Indo-Iranian relations are all to do with realpolitik and shared mutual interests. Neither are they doing any favour to us and nor are we doing any favour to them.This is something that has to be borne in mind when we have to take a decision. Decision cannot be based on a desire to cook a snook at Uncle Sam. It is time we grow up as a Nation.

Let us not forget that the shah was a puppet of usa and usa ordered there puppets in the region to help out pakistan.

 

[Param]

I just met the Russian diplomat yesterday at the Army Day.

We had a rather interesting discussion on many issues.

It was evident it is not the same Russia we knew in the old times!

It appears that they have become very pragmatic.

Good for them.

 

[sob]

Let us not forget that the shah was a puppet of usa and usa ordered there puppets in the region to help out pakistan.

Do not forget under PL 408 US supplied wheat to India on Re payment and that too they could not take the money out of India. If we had not received the shipments from the US we would have had starvation deaths in millions, in the late 60s. Russians were content to only supply us weapons. Despite this from various fora, including the NAM India was stridently anti-US and pro USSR. it is as I said all realpolitik. Enemy of my enemy is my friend.

 

[nrj]

India must be prepared for all eventualities over Iran: Reddy

India has not faced any problems in paying for crude oil it buys from Iran, but needs to be prepared for all eventualities, Oil Minister S Jaipal Reddy said today.

"We continue to be optimistic. Iran continues to be positive. However we have to be prepared for all eventualities," Reddy told reporters here.

An official said Turkey's Turkiye Halk Bankasi AS, the bank through which India routes payments in euros to Iran for about 370,000 barrels per day of crude oil supplies, has so far not declined to be an intermediary.

"All that they (Turkey) have said is that they would not like to open new accounts but will continue to service existing accounts (through which payments are routed to Iran)," the official said, adding that not a single payment has defaulted since India began using the Turkey conduct in July last year.

US President Barack Obama on December 31 signed into law measures that deny access to the US financial system to any foreign bank that conducts business with the central bank of Iran.

The European Union will discuss imposing harsher sanctions on Iran, including a ban on crude imports, in response to the country's nuclear programme when the bloc's foreign ministers meet at the end of January.

The official said India will continue to buy crude oil from Iran, but would like to replace a part of the supplies with other sources like Saudi Arabia.

Mangalore Refinery and Petrochemicals Ltd, the largest buyer of Iranian oil, at 142,000 bpd, and other refiners are yet to renew their term import contracts with Iran for the year beginning April.

Essar Oil is looking at replacing 10 per cent of the 110,000 bpd of oil it buys from Iran with other Gulf sources.

Yesterday, Foreign Secretary Ranjan Mathai had stated that New Delhi would not seek a waiver from US sanctions to protect its oil trade with Iran.

The US allows waivers for firms in countries that significantly reduce dealings with Iran or when it is either in the US national interest or necessary for energy market stability. Japan, South Korea and Turkey have all said they could seek waivers.

An Indian delegation comprising officials from the RBI, Oil Ministry, Finance Ministry and refiners is currently in Tehran to discuss alternative modes and routes of payments.

Indian refiners began using Halkbank to pay Iran in July last year after the Reserve Bank of India (RBI) scrapped a long-standing mechanism of payment through central banks.

New Delhi fears Turkey may come under pressure to halt the conduit after the US imposed a fresh round of sanctions against Iran, with the European Union slated to announce tough measures of its own in this regard at the end of the month.

Refiners have already begun talks with alternative suppliers to slowly replace some quantity of the 370,000 barrels a day of oil they buy from Iran.

MRPL, the biggest buyer of Iranian oil at 142,000 bpd, has not yet contracted any supplies for the year beginning April.

India is Iran's second-largest crude buyer, taking about 13.5 per cent of Iran's 2.6 million bpd of exports. New Delhi currently pays the world's fourth-largest oil producer about USD 1 billion every month through Turkey.

Sources said the possibility of paying Iran in rupees or through the yen would be discussed at the meeting in Tehran.

Routing payments through Russia was discussed during the visit of Prime Minister Manmohan Singh to Moscow last month. However, Russia has so far not agreed to route payments for India due to the "complexities" involved.

India must be prepared for all eventualities over Iran: Reddy - Indian Express

 

[Armand2REP]

An official said Turkey's Turkiye Halk Bankasi AS, the bank through which India routes payments in euros to Iran for about 370,000 barrels per day of crude oil supplies, has so far not declined to be an intermediary.

What is India going to do when the EU sanctions this bank?

 

[illusion8]

What is India going to do when the EU sanctions this bank?

Find an alternative, besides we are asking Iran to accept payments in INR.

 

[nrj]

What is India going to do when the EU sanctions this bank?

putting into place a rupee-rial barter trade mechanism allowing India to directly trade with Teheran.

http://defenceforumindia.com/foreig...-call-economic-freeze-opens-6.html#post395597

 

[Armand2REP]

The US forced India to scrap the Asian Clearing Union, what makes you think the US and EU can't make India scrap another trade mechanism?

 

[nrj]

Foreign Secretary Ranjan Mathai had stated on Tuesday that India would not seek a waiver from US sanctions to protect its oil trade with Iran. An Indian delegation comprising officials from the Reserve Bank of India (RBI), Petroleum Ministry, Finance Ministry and refiners is at present camping in Tehran to discuss alternative modes and routes of payments.

The Hindu : News / National : 'No oil payment problem with Iran'

 

[Armand2REP]

Turkey Said to Tell India Help on Iran Oil Payments May End

Turkey Said to Tell India Help on Iran Oil Payments May End - Bloomberg

 

[Godless-Kafir]

The US forced India to scrap the Asian Clearing Union, what makes you think the US and EU can't make India scrap another trade mechanism?

Lol you dont know what your talking about, some new asian agreement is no where near an established link for Oil...

 

[Armand2REP]

You don't know that the US and EU will go after any entity that aids Iran selling its oil. No one wants to deal with that.

 

[Godless-Kafir]

Turkey Said to Tell India Help on Iran Oil Payments May End

Turkey Said to Tell India Help on Iran Oil Payments May End - Bloomberg

Ya right, this is like closing pay pal and i will have to go to western union money transfer for fund deposit.

 

[Godless-Kafir]

You don't know that the US and EU will go after any entity that aids Iran selling its oil. No one wants to deal with that.

What west should do is stop supporting anti-Israel nations like pakistan first and impose trade sanctions. Same way this is not going to happen, Iran allows some flexibility of purchase to India and we would be arm twisted if we went to western stooges like Saudi..

 

[Armand2REP]

If Western Union is dumb enough to take your deposit, they will get hit so bad they will close your account. You can't win when the West controls the world's financial system.

 

[Godless-Kafir]

If Western Union is dumb enough to take your deposit, they will get hit so bad they will close your account. You can't win when the West controls the world's financial system.

If we prolifriate missiles and nukes you will be wiped out of the map. Then we can let the cockraches decide which way to go from there.

Also western union here is Russia and have u considered we have faced all sanctions before?

 

[The Messiah]

If we prolifriate missiles and nukes you will be wiped out of the map. Then we can let the cockraches decide which way to go from there.

Also western union here is Russia and have u considered we have faced all sanctions before?

:clap:

Fitting reply.