India engages with US to ensure energy security amid Iran sanctions

A cashier checks Indian rupee notes inside a room at a fuel station in Ahmedabad

A cashier checks Indian rupee notes inside a room at a fuel station in Ahmedabad

In a bid to cover insurance as sanction loom, Chennai Petroleum cancelled Iranian crude oil imports from October, reported Economic Times.

Japanese refiners have temporarily suspended oil imports from Iran, buying alternative supplies and watching the situation closely should waivers be forthcoming, the president of the Petroleum Association of Japan (PAJ), Takashi Tsukioka, said on Thursday.

"Iranian oil exports are coming down pretty hard", said Roger Diwan, a veteran oil analyst at consultant IHS Markit Ltd.

The US, which is renewing sanctions on Iran, reimposed some of the financial sanctions from August 6, while those affecting Iran's petroleum sector will come into effect from November 4.

Despite opposition by Europe, China and India, the U.S. decision has caused a significant slowdown in the Iranian economy after years of marked growth.

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China said it will impose retaliatory tariffs against $60 billion of USA goods, ranging from meat to wheat and textiles. He said business opportunities are still bountiful in the world, such as in Europe , South America, Russia and Africa.

U.S. President Donald Trump has threatened to sign an executive order on November 4 to snap back U.S. sanctions on Iran's energy exports and worldwide financial transactions.

India does not have a direct impact of the sanction but the country is looking for safeguard against the risk in the Western reinsurance market, which is against Iran. The other is the concern that tanker tracking data may become less reliable, as Iran may try to use some "unconventional" methods of keeping its oil sales on track, like switching off tracking devices on tankers-a "solution" that Tehran is said to have used in the previous round of sanctions in 2012-2015.

United India Insurance has informed Chennai Petroleum that its new annual policy that is set to take effect from October will not cover any liability related to processing crude from Iran, the three sources said.

Elsewhere in his remarks, the ambassador pointed to the Joint Comprehensive Plan of Action and said, "South Korean government will strongly back JCPOA, because, we are of the opinion that JCPOA will secure and guarantee peace and security in the region and world in particular". "They have agreed to provide support for only 85 per cent cover." reported an anonymous source to Economic Times. One is how much of Iran's oil China, India, and Europe will buy in October and then in November, when the sanctions kick in. India had planned to import about 25 million tonnes of crude oil from Iran in the current fiscal, up from 22.6 million tonnes imported in 2017-18.

United India Insurance and Chennai Petroleum are yet to comment on this matter.

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