New Delhi: As the clock ticks on US President Donald Trump’s unexpected decision to ban all Iranian oil purchases after May 1 – ending exemptions for eight nations including India – Minister of External Affairs Sushma Swaraj on Wednesday told US Secretary of State Mike Pompeo to hold the move till the new Indian government is formed.
The discontinuation of waivers will come into effect on May 2, while India gives its verdict in a seven-phased Lok Sabha election to form the new government at the Centre.
However, sources had explained last week itself that Washington DC may not allow flexibility on the date for exemption as the time frame was fixed by a US statute.
All qualms and fears of the resulting shortfall or escalation of prices were met with an assurance that that stability of market will be ensured and the global oil market will remain well supplied.
In a statement, the Ministry of Foreign Affairs said that “it was adequately prepared to deal with the impact of the decision” and that the government will continue to work with partner nations, including the US, in order to “find all possible ways to protect India's legitimate energy and economic security interests."
It was given to believe that both Saudi Arabia and UAE, along with US will pitch in, in case of a shortfall. Trump held conversations recently with the Saudi and Emirati leaders on oil prices and received assurances that the two oil producers will ensure the market is well-supplied.
However, Saudi Arabia's energy minister Khalid al Falih responded by saying he saw no need to raise oil output immediately. OPEC production declined by 1.6 million barrels per day between December and March, according to the organization's figures.
“Our intent is to remain within our voluntary (OPEC) production limit” but Saudi Arabia will “be responsive to our customers, especially those who have been under waivers and those whose waivers have been withdrawn, he said.
In the joint statement issued by India and Saudi Arabia in February, it was underlined that “His Royal Highness the Crown Prince reiterated the Kingdom’s commitment to meet India’s growing needs for crude oil and petroleum products and substitute for any shortages that may arise as a result of any disruptions from other sources.”
One source also pointed out that US has made a commitment to its allies and partners that they will not suffer in case of a shortfall. However, the call from Swaraj to Pompeo is strong indication that India does not want to risk its energy security, and is still looking at further extension of waiver.
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