The US diktat to all countries importing oil from Iran, including India, to stop these imports by November in enforcement of sanctions against the Iranians is a retrograde move that smacks of strong-arm tactics to isolate streams of Iranian funding.
Just as many earlier moves of US President Donald Trump, including the repudiation of the Paris climate deal and of the US-Iran nuclear deal, have evoked strong condemnation in the international community, some overt and some covert, this move too would raise the hackled in world capitals.
But Trump, a queer head of State of the world’s lone superpower is unfazed even as he moves on with his atrocious diplomacy that takes delight in rubbing other countries on the wrong side and in thumbing down agreements that his predecessor Barack Obama contributed to in high measure.
During 2011-2015, India had reduced its purchases of Iranian oil at some cost to its own development to receive from the US administration exemptions from sanctions. Subsequently, India increased oil purchases from Iran to nearly pre-2012 levels after sanctions were lifted, and in May 2016 New Delhi agreed to transfer to Iran about $6.5 billion that it owed for Iranian oil shipments but which was held up for payment due to sanctions.
Trump’s aides ruled out any exemption to India and Indian companies from its re-imposed Iranian sanctions regime for them carrying out any transaction with Iran. The earlier Obama regime had allowed India to import Iranian oil on an appeal from New Delhi. The current Trump stance underlines the difficulties of dealing with the US under Trump.
China, which is already facing a grim challenge in the shape of greatly enhanced US import duties on Chinese goods will also be severely affected if it is forced to stop oil imports from Iran.
Trump trying to cripple India, China
Evidently, Trump is targeting China and India to cripple their economies and laugh all the way to the World Bank. In Europe, Germany in particular is the target of Trump’s envious attention.
But in taking on the whole world, Trump is destroying the American image abroad of a superpower that draws respect and admiration.
Responding to questions, the State Department official said these countries that import oil from Iran should start reducing such import now and bring it to zero by November 4. "Without question, they should be reduced. That's what we've been telling them in our bilateral meetings. They should be preparing, now, to go to zero (by November 4)," he said.
In a recent report, the bipartisan Congressional Research Service (CRS) said India's position has generally been that it will only enforce sanctions authorised by UN Security Council resolutions, “rendering it likely that India will resist US efforts to compel it to comply with reimposed US sanctions such as those that mandate cuts in oil purchases from Iran."
As such, this could emerge as a major topic of discussion between India and the US during the first 2+2 dialogue next week. External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman would be in the US next week for talks with their US counterparts Secretary of State Mike Pompeo and Defence Secretary James Mattis. That the US has said there will be no exemptions, indicates that they will fail to cut much ice.
The two Indian ministers would be left thrashing out the hike in import duties on steel and aluminium which too is a major bone of contention with the Trump administration.
Already, with the recent Xi Jinping summit with Prime Minister Modi there are signs that India and China are moving closer on economic issues at the expense of the US which is facing resistance from Europe too.
The effect on international oil prices of the prospect of larger than expected loss of Iranian oil supply this winter also cannot be ignored. Oil prices climbed more than 3.5 per cent in New York as apprehensions grew.