Toeing the US
Line on Iranian Oil
THE visit of Hillary
Clinton to India
was probably her last one as the US
state. But this visit was not meant to say goodbye to her
counterparts in the
government here. The main purpose of the trip seems to have
been to ensure that
in line with the
plan of the United States
choke off Iranian oil supplies to India
and other countries.
The United States has been
imposing a series of sanctions against Iran.
latest set of sanctions adopted in late 2011 would stop US
companies from doing
business with any country that continues to buy Iranian oil
through the Iranian
central bank. The aim of the sanctions is to cut off Iran’s
oil exports and cripple its
central bank and economy. The US Congress which adopted this
law has provided
for the president to exempt from sanctions those countries
significant reductions in oil imports from Iran.
It should be noted
here that the UN
Security Council had imposed sanctions on Iran
in June 2010 which did not
apply to the Iranian petroleum industry or its oil trade. It
was the United States
and the European Union which have
adopted sanctions targeting Iran’s
The United States has been
pressurising the major importers of oil
such as China,
India and South Korea to reduce their
oil imports from Iran.
In March this year,
administration exempted Japan
and ten European nations from imposition of sanctions on the
basis that they
have taken steps to reduce oil imports from Iran.
The European Union announced
a ban on oil contracts with Iran
in January this year. It also announced that all existing
contracts would cease
by July 1.
India has been one of the
major buyers of
Iranian oil. The United States
has been putting pressure on India
for the past two years to cut back on its oil purchases from Iran.
imported 12 per cent of its oil
requirements from Iran
in the year 2010. The Mangalore Refineries is one of the
biggest customers of Iranian
oil sourcing about 7.1 million tons every year.
What has unfolded is
spectacle of the Manmohan Singh government step by step
succumbing to the US pressure and
giving in to the illegal sanctions. In 2010, the United States warned that
Indian companies using the Asian
Clearing Union for financial transactions with Iran
would be flouting US laws
prohibiting international companies doing business with
Iranian banks and its
oil industry. This led to the Reserve Bank of India
curbing transactions with Iran
being settled through the Asian Clearing Union. Subsequently,
India and Iran
tried to resolve the issues of
payments for oil supplies through banks in third countries. At
first a bank in Germany was
doing these transactions. But this stopped after the German
these dealings under US
pressure. Then a Turkish bank was selected and after some time
had to be given up.
At present an Indian
bank, the UCO
Bank is the bank designated for the rupee payments to be made
by the Indian oil
government has not permitted an Iranian private bank, the
Parsian, to open a
branch in Mumbai. Such a branch would have helped in
facilitating trade and
payments to be made.
The relentless US
to the government directing the oil companies which are
importing Iranian oil
to reduce their oil intake. As a result the Mangalore
Refineries and the
Hindustan Petroleum Company have reduced their orders. The
Essar company has
also cut back their orders.
While this has been
going on, the
Manmohan Singh government has been officially taking a stand
needs require Iranian oil. Finance minister, Pranab Mukherjee
on a visit to the
declared that India
cannot cut back on oil imports from Iran.
However, the reality
different. In 2008-09, India
imported 21.8 million tons of oil from Iran. This came down to
18.5 million tons in 2010-11.
In 2011-12, this has come down to around 14 million tons which
is a drop of 20 per
cent from the previous year.
While the UPA
government is adopting
an official stance that India
cannot do without Iranian oil, at the same time, it is
providing assurances to
that steps are being taken to cut back on Iranian oil imports.
This is why Hillary
Clinton told a
Congressional committee in March that India
was responding to demands to cut back on oil
purchases from Iran.
During her current trip to Kolkata, she commended the steps India has taken to reduce oil
imports from Iran. In Delhi,
after talks with the foreign minister S M Krishna, she stated:
“I welcomed the
is making to
reduce its purchases of oil from Iran,
and hope to see continuing
Clinton was in Delhi,
a report of
which is a research wing of the US Congress, was published. It
stated that India had
significantly reduced its import of Iranian oil from 16 per
cent in 2008 to 10
per cent currently.
How the government
wilts under the
relentless pressure from the United
was also seen in the way the Indian Embassy in Washington
reacted to criticism
in the American
media and by US Congressmen about India’s
continued oil trade and ties with Iran. A press release from
the Indian Embassy in
Washington dated March 7, 2012 stated: “Allusions in the media
overall oil imports from Iran are increasing just because its
monthly uptake of
Iranian oil reportedly increased in January this year are
based on selective
use of information, misrepresenting the fact that in aggregate
imports from Iran constitute a declining share of India’s oil
Nonetheless, given the imperative of meeting the energy needs
of millions of
Indians, an automatic replacement of all Iranian oil imports,
is not a simple
matter of selection, or a realistic option.”
That the US
is imposing illegal sanctions against Iran
and threatening third countries from doing business with Iran
something which is not objected to by the UPA government. Even the efforts by
India to try and maintain
a reduced oil trade in rupees and to get Iran to buy goods and
India in return, is being attacked by the US Congressmen and the media.
behaved arrogantly in
when she lectured the government there about Mohamad Yunus,
the Grameen Bank
founder, who was removed from the chairmanship of the Bank.
She then proceeded
to Kolkata to tell Mamata Banerjee about how to settle the
Teesta waters issue
and to accept FDI in retail. There was no word from the UPA
what she was doing in Kolkata was out of line.
The giving in to US
pressures on Iran by the UPA
government goes back a long way.
since the joint statement by president Bush and prime minister
Manmohan Singh in
July 2005, the UPA government was set on the road to align its
with the United
States. In September of that
voted for the first time in the IAEA
The Hyde Act passed by the US Congress set out the need for India to cooperate with the United States to isolate Iran. Under US
gave up the Iran-Pakistan-India gas pipeline project. The same Hillary
Clinton had explicitly asked
to proceed with
the gas pipeline project with Iran.
Right now the Manmohan Singh government is busy behind the
scenes, trying to
qualify for the exemption from sanctions that president Obama
has to grant by
end June. It has
to show that it has
significantly cut back on oil imports from Iran.
Iran has been a
traditional supplier of
oil to India.
It has been cheaper to access Iranian oil compared to other
countries. The gas
pipeline would have also ensured cheaper gas which India
desperately needs. Iran
is the gateway to Afghanistan
and to Central Asia for
Indian goods and trade. Yet all this is jeopardised by
the anxiety to be on the right side of the United States.
The current episode
is a sad
commentary on the manner in which the Manmohan Singh
government sacrifices the
vital interests of the country at the altar of the Indo-US