Extensive Negotiations Between the U.S. and India to Halt Oil Imports from Iran

A U.S. State Department official has announced that during a visit by senior officials to India, "extensive negotiations regarding the technical details of completely halting oil purchases from Iran" have taken place. Secretary of State Mike Pompeo and Defense Secretary James Mattis traveled to India on Wednesday, September 5. Reuters reported on Thursday, September 6, citing the U.S. State Department official, that the U.S. has requested not only India but also other customers of the Islamic Republic to reduce oil purchases from the country to zero. According to U.S. officials, "extensive negotiations with Indian officials are currently ongoing to examine the technical details of halting oil purchases from Iran, and these negotiations will continue." President Donald Trump announced the U.S. withdrawal from the JCPOA on September 9 and stated that sanctions against Iran would be reinstated. The first round of sanctions, which included industrial and financial sectors, was implemented last month, and the second round targeting Iranian oil exports is set to take effect on November 4. Reuters writes that last month an Indian official told the news agency that during the meeting of senior U.S. officials in New Delhi, there was no intention to reach an agreement on "completely halting" oil purchases from Iran, but India would finalize its "oil purchase strategy." The report adds that Iran is not idly sitting by to continue its oil exports. The Islamic Republic has taken on the costs of shipping and insurance for oil exports to China and India, in addition to offering discounts and extending payment opportunities. Meanwhile, Bloomberg recently reported that Iran is currently transporting oil sales to India and China for free with its tankers, but despite this advantage, Asian customers have significantly reduced their oil purchases from Iran. Reuters also states that last month, India's oil imports from Iran decreased by one-third, as state refineries were awaiting official permission from the New Delhi government to continue imports from Iran. Indian and Chinese officials have repeatedly stated that they wish to maintain trade relations, including oil trade, with Iran. On Monday, September 3, Reuters reported, citing informed sources, that following the cessation of cooperation between Indian shipping companies and Iran due to concerns over U.S. sanctions, the Indian government has allowed its state refineries to continue buying oil from Iran using Iranian tankers and insurance. So far, only South Korea has completely stopped purchasing oil from Iran since July. Other Asian and European customers have also temporarily reduced their imports of the Islamic Republic's oil. The U.S. had initially stated that customers of Iran must completely stop oil purchases by November 4. However, Bloomberg recently reported that the U.S. has reconsidered its stance on completely cutting off Iranian oil exports and aims to reduce them by half. Last year, Iran exported more than 2.5 million barrels of oil and gas condensates daily. According to statistics, this figure dropped to 2 million and 50 thousand barrels last month (a decrease of 450 thousand barrels) and is expected to fall to 1.5 million barrels this month.