Clinton warns India over Iranian oil

Posted on May 7, 2012

Hillary Clinton, US secretary of state, urged India to do more to reduce its oil imports from Iran, as part of Washington’s continuing efforts to curb Tehran’s nuclear programme by cutting off an important source of revenue.

Speaking in Calcutta, eastern India, on Monday, Mrs Clinton said that India’s efforts to reduce its purchases of Iranian oil were welcome, but she added that New Delhi should do “even more” to reduce its dependence on Iranian crude.

    “If there weren’t an adequate supply [of oil] … we would understand, but we believe that there is adequate supply,” Mrs Clinton said. “We commend the steps they have taken and we hope they will do even more.”

    India is the world’s second-largest purchaser of Iranian crude after China importing more than 300,000 barrels per day.

    From July, Washington has threatened to sanction foreign banks that are involved in the purchase of Iranian oil, adding pressure on Asian countries, including China, Japan and South Korea which – combined with India – account for more than 60 per cent of Iranian oil exports, to cut supplies.

    Japan, South Korea and China have all reduced imports in recent months. But New Delhi, which firmly rejects the sanctions, hopes that Washington will give India a waiver, similar to the one granted to Japan last March, following its efforts to reduce imports.

    Mrs Clinton, who will meet Manmohan Singh, India’s prime minister, on Tuesday, said that a decision on whether to give India a waiver would be taken in the next two months.

    In recent months India has called on its refiners to reduce their reliance on Tehran. Although an exact figure has not been made public, local media reports, said Delhi had reduced its imports by about 15 per cent.

    Pranab Mukherjee, India’s finance minister, said last month that “in terms of percentage it [oil imports] has been reduced substantially.” He did not provide an exact number.

    Washington is concerned that New Delhi will do little to further cut oil imports. But one former US Treasury official told the Financial Times earlier this year that US sanctions against Indian banks for involvement in energy-related transactions was unlikely.

    New Delhi also sees Tehran as an important strategic ally, as the Islamic republic offers India access to Afghanistan – where it is playing a role in the fight against the Taliban and rebuilding the country – bypassing its bitter rival Pakistan.

    However, New Delhi’s defiance would be embarrassing for Washington, making it harder for the US to put more pressure on China to cut its oil ties with Tehran.

    “We believe, at this moment in time, the principle threat is a nuclear-armed Iran,” Mrs Clinton said. “We need India to be part of the international effort.”

    Mrs Clinton is also expected to put pressure on New Delhi to open up the country’s lucrative retail market to US supermarkets.

    Separately Mrs Clinton called on Pakistan to do more to curb the activities of militant leader Hafiz Saeed, leader of Lashkar-e-Taiba, the group blamed for the 2008 Mumbai attacks. In April the US took the unusual step of offering a $10m reward for information leading to Mr Saeed’s arrest.

    “We’re well aware that there has not yet been the steps taken by the Pakistani government to do what both India and the United States have repeatedly requested them to do [regarding Mr Saeed],” said Mrs Clinton.

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