A support vessel flying an Iranian national flag sails alongside the oil tanker ‘Devon’ as it prepares to transport crude oil to export markets in Bandar Abbas, Iran. (Photographer: Ali Mohammadi/Bloomberg)

India Vows to Ignore Trump's Sanctions and Continue Iran Imports

(Bloomberg) -- President Donald Trump may have ordered the re-imposition of sanctions on Iran, but one of Asia’s biggest oil importers -- and a strategic partner of the U.S. -- plans on ignoring them.

India, a long-time buyer of oil from both Iran and Venezuela, only complies with United Nations-mandated sanctions and not those imposed by one country on another, said foreign minister Sushma Swaraj at a press conference in New Delhi on Monday.

“India will comply with UN sanctions and not any country-specific sanctions,” Swaraj said at an annual briefing, flanked by her two junior foreign ministers and India’s foreign secretary.

Swaraj later met Iranian foreign minister Javad Zarif, where they discussed Trump’s plan to withdraw from the 2015 Iran nuclear deal. Swaraj said "all parties to the agreement should engage constructively for peaceful resolution of the issues," according to a foreign ministry statement.

Indian refiners had slashed purchases of Iranian crude to about half their previous levels when the United Nations, European Union and U.S. imposed a broad array of economic sanctions against Tehran. Nevertheless, India continued to import Iranian crude oil and was among the last six customers of the Persian Gulf nation.

Purchases by India, which meets over 80 percent of its oil needs through imports, surged after the sanctions were lifted in 2016. Indian refiners bought a record 27.2 million tons of Iranian oil during the year through March 2017, a whopping 114 percent increase over the previous year

India is the world’s third-biggest oil consumer. The South Asian nation is also expected to be the fastest-growing oil consumer through 2040, according to the International Energy Agency.

Closer Ties

Washington and New Delhi have overcome Cold War-era tensions and grown much closer in the past two decades, in part due to U.S. strategic concerns about China’s growing influence in Asia.

But India’s post-independence history as a leader of the "non-aligned" movement -- developing nations not allied with the U.S. or the then-Soviet Union -- means New Delhi maintains economic relationships that raise eyebrows in western capitals, including with Iran, Venezuela and North Korea. India also ignored U.S. requests to close its embassy in North Korea, Swaraj said at her briefing.

In February, Iranian president Hassan Rouhani visited India and met with Indian Prime Minister Narendra Modi to discuss energy cooperation and New Delhi’s investments in Iran’s Chabahar port.

Trump is also considering new sanctions on Russia, a historic ally and key supplier of arms to India, related to allegations that Vladimir Putin’s government interfered in the U.S. election.

©2018 Bloomberg L.P.

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