Coincidence? Iran Seizes Indian Ship After India Cuts Oil Imports
Here’s a coincidence that suggests Iran’s anger and frustration over U.S. and EU sanctions on its oil exports as observed or not by India.
With Iran falling from second to sixth or seventh among India’s sources of oil, Iranian Republican Guards this week detained an Indian oil tanker carrying 140,000 tons of crude from Iraq, which now vies with Saudi Arabia as the greatest source of Indian oil.
Iran, nor unexpectedly, pooh-poohs any insinuation that the Desh Shanti was held for any reason other than “purely a technical and non-political issue” having to do with Iran’s zeal to preserve the environment. The ship, owned by the Shipping Corporation of India, was more or less hijacked in the Persian Gulf by Republican Guards after leaving the Iraqi port of Basra and forced into Bandar Abbas.
It’s actually not clear what’s been going on, according to sources in New Delhi, but Indian authorities do not place any credence in the Iranian claim of violations of guidelines set forth by the Marine Emergency Mutual Aid Center of the Regional Organization for Protection of Maritime Environment.
The Press Trust of India quoted a shipping ministry official as saying that the ship, launched nine years ago, had passed inspections by “maritime authorities and international surveyors.” The official added that the ship was not even carrying crude on the day that it was alleged to have violated environmental guidelines – July 30.
The real question, in the Indian view, is whether the Republican Guards seized the ship in hopes of a payoff or as punishment for not having received a payoff. Then there’s the question of whether authorities in Tehran really endorsed seizure of the ship or whether the Republican Guards were acting on their own – perhaps to the embarrassment of Tehran.
While officials from Iran and India negotiated for release of the ship, the statistics showed why Iran might be upset by the state of its oil exports to India. In the 2012-2013 fiscal year India imported 13.3 million metric tons of crude from Iran after having imported 18.1 million metric tons the year before. That’s 267,100 barrels a day as opposed to 362,500 b/d – a slide of 26.5 percent.
India is not overjoyed about the sanctions, which it’s not observing officially, but oil imports from Iran have gone down nonetheless. Sources say insurance companies refuse to insure Indian refineries processing Iranian oil or ships carrying oil from Iran whether flying Indian or other flags. Banks, moreover, are said to be refusing to extend credit. Asia’s other major oil importers, Japan, China and South Korea, also have cut imports from Iran.
The argument is all of them need to cool it with Iran for the sake of a wide range of commercial, military and diplomatic relations with both the U.S. and the European Union, which has followed the U.S. lead on sanctions. The result is that most of the crude that’s shipped from Iran to India has had to move on Iranian vessels while India increases its imports from other countries, notably Iraq. India imports 80 percent of its oil, 60 percent of that from the Persian Gulf.
Senior U.S. diplomats, meanwhile, have reportedly assured their Indian counterparts that the U.S.won’t consider reprisals, penalties or anything much at all against India for not observing sanctions on Iran.
The U.S. view, said a source in New Delhi, is “we have more important issues to consider” – a raft of trade, regulatory and other commercial problems as well as the need to coordinate policies vis-à-vis China and Pakistan. Yes, Japan, China and Korea have similar “exemptions” despite innumerable trade and investment hassles with all of them.
Coincidence? Iran Seizes Indian Ship After India Cuts Oil Imports - Forbes
