United States has announced that all buyers of Iranian oil will have to end their imports by May 2,2019 or face sanctions.The US has announced this to put maximum economic pressure on Iran and through sanctions it eventually aims to halt Iranian oil exports and thereby choke its main source of revenue.
Earlier,the US had granted exemptions to (a)China (b)India (c)Italy (d)Greece (e)Japan (f)South Korea (g)Taiwan and (h)Turkey from sanctions on Iran.The exemptions were meant to last six months.
These countries were granted sanctions to give them time to find alternate energy sources but also to prevent a shock to global oil markets from the sudden removal of Iranian crude.
The US decision to end waivers may hurt India’s interests as it will have to look for alternative sources of oil.Further,the US sanctions on Venezuela are already restrictive for India.Also,if the total supplies from these two big oil exporters is kept out of the market,it will lead to increase in overall crude oil prices.
India is the world’s third-largest consumer of oil with 85% of its crude oil and 34% of its natural gas requirements being fulfilled by imports.In 2016,Iran stood third among India’s biggest oil suppliers after Saudi Arabia and Iraq.