Iran Hosts Second Indian Minister in a Week

India's Foreign Minister Subrahmanyam Jaishankar held talks Tuesday in Tehran, becoming the second senior Indian minister to visit Iran this week.

"A productive meeting with FM @JZarif during a stopover in Tehran," he tweeted, after a meeting with his Iranian counterpart Mohammad Javad Zarif.

Jaishankar said they "discussed strengthening our bilateral cooperation and reviewed regional developments.”

Zarif, also on Twitter, wrote: "Our active engagement with our neighborhood is our top priority."

On Sunday, Indian Defence Minister Rajnath Singh Amir Hatami also held talks in Tehran.

During Jaishankar's last visit in December, before the outbreak of the coronavirus epidemic which has hit both countries hard, Tehran and Delhi said they had agreed to speed up the development of the Iranian port of Chabahar on the Indian Ocean.

Work has been stalled, despite waivers to sanctions that the United States has reimposed on Iran after withdrawing from a landmark 2015 nuclear deal.

"Indian policy is aimed at maintaining a balance in the complex Persian Gulf and the larger West Asia region," Manoj Joshi, a defence and foreign policy expert at New Delhi based think-tank Observer Research Foundation, told AFP.

"New Delhi has always wanted to have good relations with all the countries like Saudi Arabia, Iran and Israel... These visits need to been seen in that context."

Joshi said India also wanted to balance Chinese influence in the region.

"Iran is also important in the sense that China has been dominating the region, and New Delhi doesn't want to give a free run to Beijing," he said.

Iran is the closest major source of resources for India.

Photo: IRNA

Sanctions Push Iran Past Russia as Biggest Buyer of Indian Tea

By Pradipta Mukherjee

Iran overtook Russia to emerge as the top buyer of Indian tea last year, after sanctions against the Islamic Republic halted imports other than specially negotiated deals.

India and Iran have been trading through a rupee-based bank account to bypass restrictions imposed by the U.S. While this bilateral trade has boosted imports of the Indian leaf at higher-than-normal prices, the outlook for orthodox teas is uncertain with even Lipton owner Unilever Plc weighing a sale of one of its best-known brands.

“This boost really has come because of the rupee-rial trade arrangement that we have had with Iran,” said Azam Monem, a director at McLeod Russel India Ltd., which is among the nation’s largest tea exporters. “India’s diplomacy should allow us to remain a partner to Iran where we supply humanitarian aid, tea and rice.”

Iranian Imports:

• Iran imported 53.5 million kilograms of tea from India last year, a rise of 74% from 2018

• The price per kilogram for Iranian purchases rose to about 276 rupees ($4) from 255 rupees, data from India’s Tea Board show

• Russian shipments dipped 3% to 46 million kilograms

Overall, Indian exports dropped 3% to 248 million kilograms last year as bad weather hit production in the crucial months of June and July. Prices rose 8.5% to 226 rupees per kilogram.

India also saw a 30% increase in shipments to China, the world’s biggest producer of tea, due to rising demand in the green-tea-drinking nation for India’s black-tea brands. Indian leaves such as Darjeeling, Assam and Nilgiri are used in processing the ready-to-drink milk tea popular across Asian nations.

However, India’s tea industry faces headwinds in controlling costs, after an increase in wages last year. Prices are unlikely to rise in 2020 unless consumption surges, according to Vivek Goenka, chairman of the Indian Tea Association.

“Any material increase in wage rates in the new season, without a substantial increase in tea prices, would prolong the stress,” said Kaushik Das, an analyst at Icra Ltd.

Photo: IRNA

Iran and India Agree to Speed up Major Port Project

Tehran and Delhi have agreed to accelerate the development of an important Iranian port, India's foreign minister said during a visit to the sanctions-hit Islamic republic on Monday.

Chabahar port—being jointly developed by India, Iran and Afghanistan—is on the Indian Ocean about 100 kilometres (62 miles) west of the Pakistan border.

But development has stalled, despite waivers to sanctions that the United States began reimposing last year after withdrawing from a landmark 2015 nuclear deal with Iran.

"Just concluded a very productive #IndiaIran Joint Commission Meeting," Indian Foreign Minister Subrahmanyam Jaishankar tweeted.

"Reviewed the entire gamut of our cooperation. Agreed on accelerating our Chabahar project," he added as he wound up a two-day visit to the Iranian capital.

Washington withdrew from the nuclear accord and reimposed sanctions on Tehran as part of a campaign of "maximum pressure" aimed at reducing its arch-enemy's regional role and missile programme.

The rare exemptions from the sanctions are due mainly to the pivotal role of the port, and a planned railway line, in breaking landlocked Afghanistan's dependence on Pakistan for trade.

Iran's President Hassan Rouhani said Monday in a joint news conference with Jaishankar that the project would boost trade in the region.

"Completing the Chabahar-Zahedan railway and connecting it to Iran's national railway can elevate the position of Chabahar port, revolutionise regional commerce and help transport goods on a cheaper and shorter route," he said.

Rouhani said maintaining regional security was an important topic for Iran and India.

"In the current situation where America stands against nations with unilateral sanctions, we have to try to continue bilateral cooperation.

"This situation certainly will not last, and America will be forced to stop its maximum pressure against Iran sooner or later," he said, without elaborating.

India stopped buying Iranian oil after the US abolished waivers for some countries in May, in a move meant to wipe out the Islamic republic's main source of revenue.

Despite tensions in their relationship, Iran and India have sought to move forward and develop partnerships.

Photo: IRNA

India Has Ended Iranian Oil Imports: Envoy

India has ended all imports of oil from Iran, its ambassador in Washington said Wednesday, becoming the latest country to grudgingly comply with threatened US sanctions.

India had already sharply decreased its imports from Iran and bought one million tons of crude in April, the last month before Washington stepped up its pressure campaign against Tehran and ended all exemptions to sanctions, Ambassador Harsh Vardhan Shringla said.

"That's it. After that we haven't imported any," Shringla told reporters during a briefing on Prime Minister Narendra Modi's election victory.

Shringla said that energy-hungry India has also ended all imports from Venezuela because it considered itself a partner of the United States—but said the shift had caused pain at home, with Iran formerly supplying 10 percent of India's oil needs.

Calling Iran "an extended neighbor" of India with longstanding cultural links, Shringla declined to say if New Delhi shared President Donald Trump's concerns about Tehran.

“This is an issue that has to be dealt with, really, between the United States and Iran. We are only, in many senses, looking at it as a third party," Shringla said.

But he added: "We would not like to see a move towards any escalation in any way in that area, for the simple reason that we depend very heavily on stability in that part of the world."

Trump last year pulled out of a multinational pact under which Iran drastically scaled back its nuclear work in return for promises of sanctions relief.

The Trump administration has instead ramped up economic pressure on Iran and recently deployed military assets including an aircraft carrier strike group to the area.

The United States as of May 2 has ended exemptions it had given to eight governments from its unilateral order to stop buying Iranian oil.

Turkey, which enjoyed a waiver and vocally disagreed with the US policy, has also stopped importing oil from Iran, a Turkish official said Tuesday.

State Department spokeswoman Morgan Ortagus welcomed the news from Turkey.

"We want the whole world to comply with these sanctions, and we're grateful for our partners and allies that are respecting them," she told reporters.

The Indian ambassador, however, voiced confidence that US sanctions would not affect its partnership in developing Iran's Chabahar port.  

India wants to use the port to ship supplies into Afghanistan in a detour from its arch-rival Pakistan, which historically backed the Taliban. 

"I think it is in the interest of both our countries and all others concerned to ensure that that lifeline continues for the people of Afghanistan," Shringla said.

Photo: IRNA

End of Iran Sanctions Waivers to Hit Indian Economy

The end on Thursday of US sanctions waivers for purchases of Iranian oil is likely to hit India's economy hard, increasing fuel costs and quickening inflation, analysts say.

Last May, President Donald Trump withdrew Washington from the 2015 Iran nuclear deal with world powers that had given Tehran sanctions relief in exchange for curbs on its nuclear program.

The United States reimposed oil sanctions on Iran in November but initially 
gave eight countries—including India and several other US allies—six-month reprieves.

Washington announced last week that the waivers, which have also benefited 
China and Turkey, would expire on May 2. 

"US sanctions on Iran is a double whammy for India after the Venezuelan sanctions," said Vandana Hari, founder of Vanda Insights, a global energy markets portal.

"It will have to pay more for imports and face higher foreign exchange outflows," she told AFP.

India—Asia's third-largest economy —imports over 80 percent of its crude oil requirements, leaving it vulnerable to oil price surges

A barrel of crude recently hit a six-month high of USD 75 due to America's sanctions on Iran and Venezuela. 

India buys mostly from Saudi Arabia but has a long history of purchasing Iranian crude. 

New Delhi announced last month that it would acquire additional supplies from elsewhere but analysts say it won't be able to fill the gap left by Iran. 

"No one is going to give charity to India in the oil market. Even Saudi Arabia has no plans to replace Iranian crude in the global market," Madhu Nainan, editor of PetroWatch, told AFP.

Oil is paid for in dollars and soaring crude prices puts pressure on India's rupee. 

Higher prices also increases the cost of fuel at India's pumps and curtails government attempts to keep inflation low.

India's government cut fuel duties last year in an attempt to quell public anger after protesters took to the streets against record petrol prices.

With inflation low presently, India's central bank has cut interest rates twice this year to help boost the economy. 

Any surge in inflation sparked by the end of the sanctions waivers would make it hard for the Reserve Bank of India to cut again at its next meeting in June.

India is busy with a mammoth general election and analysts say whoever forms the next government—Narendra Modi's Bharatiya Janata Party or Rahul Gandhi's Congress—will have to come up with a long-term solution for its oil needs. 

"The Indian government needs to send a message to Washington that it understands the need for sanctions but also to press it to find a resolution to the problem," said Hari.

Photo: IRNA

Iran Looks to Remote Port to Beat US Sanctions

With the web of US sanctions tightening, Iran faces a host of challenges as it looks to an isolated port in the country's far southeast to maintain the flow of goods.

The port in Chabahar, only about 100 kilometers (62 miles) from the Pakistan border and located on the Indian Ocean, is Iran's largest outside the Gulf.

It is also the only Iranian port with exemptions from unilateral economic sanctions reimposed by the United States in 2018.

That is due mainly to the pivotal role of the port, and a planned railway line, in breaking landlocked Afghanistan's dependence on Pakistan for trade with the world, especially India.

Afghan trade as well as plans for a trading route by rail between central Asia and the Indian Ocean called the North-South Corridor are the main reasons the Islamic republic has invested one billion dollars in Chabahar's Shahid Beheshti port, official sources say.

"We will keep on developing this port... our rail network, road network and airport are all being developed, so that we can implement the North-South Corridor," Roads and Urban Development Minister Mohammad Eslami told AFP while visiting Chabahar for a development conference.

‘Traffic will Pick Up'

More than 200 hectares (almost 500 acres) of land have been reclaimed from the sea for the project and over 17.5 million cubic meters (618 million cubic feet) dredged, creating a 16.5-meter (54-foot) draught.

But more than a year since the new installations became operational in December 2017, business has yet to pick up.

The ships that officials say have docked in the past year have only loaded and unloaded 2.1 million tonnes of cargo, a far cry from the port's annual capacity of 8.5 million tonnes.

Only 20 ships have docked at the new section of the port and most of its three kilometers of waterfront remains unutilized, with new machinery and neatly lined-up cranes standing idle.

But authorities remain upbeat about the prospects for growth.

Hossein Shahdadi of the provincial ports and maritime authority said that in the first 11 months of the past Iranian year, which started on March 21, 2018, "there has been a 56 percent increase in cargo handled at the port compared with the previous year.”

"We've also had a 25 percent rise in the number of ships calling at the port" on the Gulf of Oman, he said.

Arun Kumar Gupta, managing director of India Ports Global Limited which has a 10-year concession at the new port, played down the startup issues.

"Any port will have a gestation period, there will be lulls but we are very sure that traffic will pick up," Gupta told AFP.

'Born with Sanctions'

The Indian company began work in December and has so far handled only an average of 60,000 tonnes of cargo per month.

But Gupta is counting on the port's proximity to India and Afghanistan to attract business.

Chabahar's location, however, carries its own risks as it lies in the volatile Sistan Baluchistan province where militant jihadists operate.

In December, a suicide attack on the local police headquarters killed two policemen.

During an investment conference in February, security was tight with many roads cut off and hundreds of armed security personnel deployed to protect delegates.

Apart from security concerns, US sanctions banning financial transactions with Iran make it ever harder to pay or receive payments.

Some like Afsaneh Rabiani, who runs a freight forwarding company, see Chabahar as an opportunity for "those willing to take the risk".

“I've been researching Chabahar for the past year and a half, and the infrastructure is now in place to do serious work here," she said.

As for the sanctions, Iran's roads minister said the challenge was nothing new.

"We were born with sanctions. Ever since the (1979 Islamic) revolution, we have been under sanctions and we are working on how to counter them," Eslami said, as he oversaw the unloading of a first shipment of Afghan goods lined up to be re-exported from Chabahar.

Photo Credit: IRNA

Iran Gets a Little Sweet Relief From Oil-Money Headache in India

Sanctioned by the U.S., Iran has found a sweet way to use the cash it is accumulated from trading oil: Purchase sugar from India.

Iran is struggling to spend the rupees it’s made from oil sales to India that are sitting in the south Asian nation’s banks. Meanwhile, sugar stockpiles are stacking up in India after a bumper crop. Now the two have struck a deal that eases each other’s woes—albeit only to some extent.

The Government Trading Corporation of Iran will buy 150,000 tons of raw sugar from Indian mills for delivery in March-April, paying in rupees from escrow accounts held at UCO Bank. Indian sweeteners regain access to an old market, which has been dominated by Brazil, the world’s biggest producer and exporter.

This payment mechanism will allow India, which imports nearly 80 percent of its crude, to comply with the condition that forbids direct fund transfers to Iran for a U.S. waiver from sanctions. It also opens an outlet for India’s swelling sugar reserves as local production exceeds demand for a second consecutive year. The Asia nation, which vies with Brazil as the world’s top sugar producer, is looking to boost exports.

India could potentially sell more commodities to Iran. India imported crude oil worth USD 12.6 billion from the Persian Gulf country last year, while goods sold—such as basmati rice, oilseed meal and tea—were worth only USD 2.9 billion, according to India’s Directorate General of Commercial Intelligence and Statistics.

Photo Credit: DepositPhoto

Iran, India Move Closer on Trade as EU Stalls

Iran will boost trade with India as the European Union struggles to find a way to circumvent a fresh US embargo on Tehran, Iranian Foreign Minister Javad Zarif said Tuesday.

Brussels is working on a payment mechanism to keep financial transactions flowing with Iran, after the US ditched the 2015 nuclear deal with Tehran earlier this year and reintroduced a raft of sanctions on the country.

But Zarif told reporters in New Delhi that the EU's delay in implementing the system meant Iran would look elsewhere.

"Europeans have made efforts but couldn't... progress up to our expectations. We will expand our cooperation via various channels such as India," Zarif said after meeting India's transport minister, as quoted by Iran's semi-official news agency ISNA.

The EU hopes its "special purpose vehicle" (SPV) announced in September will keep the nuclear deal alive and persuade Tehran to stay on board by giving companies a way of trading with Iran without violating Washington's sanctions.

But Brussels is struggling to find a host for the SPV and many EU companies are fearful of repercussions from US President Donald Trump's administration.

India, which imports around 80 percent of its oil needs, recently signed a deal with Iran to buy crude in rupees rather than US dollars, helping it get around the sanctions.

Zarif added that Iran was "very happy" that the Indian government was allowing the Iranian Bank Pasargad to open a branch in India's financial capital of Mumbai.

India also recently took over the running of part of Iran's Chabahar Port, in the Gulf of Oman, as the countries build closer ties.

“We hope, despite US sanctions, Iran and India will have more cooperation in line with the interests of the people and the two countries," said Zarif.

Photo Credit: IRNA

US Exempts Indian-Backed Port in Iran from Sanctions

The United States said Tuesday it would exempt Iran's Indian-backed port of Chabahar from new sanctions on Tehran, recognizing the value of the project to Afghanistan.

Iran late last year inaugurated the port on the Indian Ocean which provides a key supply route to landlocked Afghanistan and allows India to bypass its historic enemy Pakistan.

The United States will exempt from sanctions the development of Chabahar along with an attached railway project and Iranian petroleum shipments into Afghanistan, the State Department said.

President Donald Trump's "South Asia strategy underscores our ongoing support of Afghanistan's economic growth and development as well as our close partnership with India," a State Department spokesperson said.

"This exception relates to reconstruction assistance and economic development for Afghanistan. These activities are vital for the ongoing support of Afghanistan's growth and humanitarian relief," the spokesperson said.

The United States, which has been building closer relations with New Delhi since the late 1990s, earlier exempted India from sanctions that took effect on Monday.

The Trump administration has vowed to exert maximum pressure on Iran to end its support for regional proxies, exiting a denuclearization agreement that brought sanctions relief.

Trump's decision has been opposed by European powers as well as other nations including India, which has largely warm relations with Iran and accuses Pakistan of fomenting attacks on its soil.

India has poured USD 2 billion into Afghanistan since the 2001 US-led overthrow of the extremist Taliban regime, which was also opposed by Iran.

India has seen Chabahar as a key way both to send supplies to Afghanistan and to step up trade with Central Asia as well as Africa.

Iran has plans to link the port by railway to Zahedan on the Pakistani border up to Mashhad in the northeast.

Photo Credit: IRNA

US to Exempt China, India, Japan from Iran Oil Sanctions: Pompeo

The United States will exempt China, India and Japan from oil sanctions on Iran, Secretary of State Mike Pompeo said Monday, while vowing to be "relentless" in pressuring Tehran.

Hours after sweeping sanctions were reimposed following the US withdrawal from a denuclearization deal, Pompeo said eight countries would be at least temporarily exempt from the ban on buying Iranian oil due to special circumstances or so as not to disrupt energy markets.

The countries with the waivers will be China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey, Pompeo said.

“Our objective is to starve the Iranian regime of the funds it uses to fund violent activity throughout the Middle East and around the world. Our ultimate goal is to encourage them to abandon their revolutionary course," Pompeo told reporters.

A notable omission was Iraq. Had Iraq been granted a waiver, Iran might have been able to skirt sanctions by mixing its crude with its neighbor's output, analysts say.

President Donald Trump withdrew in May from the deal that his predecessor Barack Obama had reached with Iran, calling it a failure because it addressed only the clerical regime's nuclear program.

Pompeo reiterated demands for Iran to make a "180-degree turn" from its regional policies rooted in the 1979 Islamic revolution, such as support for the Lebanese militia Hezbollah.

“We hope a new agreement with Iran is possible, but until Iran makes changes in the 12 ways I listed in May, we will be relentless in exerting pressure on the regime," Pompeo said.

Pompeo said the eight countries exempted have "already demonstrated reduction of Iranian crude over the past six months and, indeed, two of those eight have already completely ended imports of Iranian crude and will not resume as long as the sanctions remain in place."

"We continue negotiations to get all of the nations to zero," he said.

Pompeo also said without specifying that the United States would exempt three non-proliferation projects underway in Iran from the sanctions.

European powers have strongly disagreed with Trump's decision, pointing out that Iran is abiding by the nuclear agreement, and have looked to create ways to allow its businesses to keep up commerce with the country.

Photo Credit: Deposit Photos

US Eyes Limited Waivers for Iran Crude Buyers

The US administration likely will enable some countries to continue importing oil from Iran in the short term, despite Washington's maximum pressure campaign against Tehran, White House national security adviser John Bolton said today.

"We understand, obviously, that a number of countries, some immediately surrounding Iran, and others that have been purchasing oil, may not be able to go all the way to zero," Bolton said at a forum hosted by the Washington-based Alexander Hamilton Society. "We want to achieve maximum pressure, but we do not want to harm friends and allies either. We are working our way through that."

The sanctions statutes that President Donald Trump re-activated in May require the administration to assess by 4 November, and every 180 days after that date, whether buyers of Iranian crude are "significantly reducing" their purchases. The administration can then sanction financial institutions in countries that it deems have not cut their purchases adequately and grant exemptions to countries that do.

The State Department is expected to provide such exemptions before the full brunt of US sanctions pressure begins on 5 November, even though the scope of waivers is yet undetermined.

China, India and Turkey were among the largest buyers of Iranian crude before the US withdrew from the Iran nuclear deal. US sanctions explicitly exclude exports of natural gas from Iran to its neighbors, but lack of guidance from Washington has created uncertainty for natural gas importers in Turkey and Iraq.

Iranian oil exports have fallen faster and by a greater amount than initially expected, as refiners in Asia-Pacific and Europe curbed their purchases, despite opposition from some of their governments.

"You already see reduction in purchases in countries like China, that you would not have expected, countries that are still in the nuclear deal," Bolton said. "European businesses are fleeing the Iranian market. Most of the big ones are already out."

Argus estimates that Iranian crude loadings fell to 1.58mn b/d in September, down by 12pc since August. But these figures do not include vessels belonging to Iran's state-owned NITC, which have stopped transmitting GPS transponder signals. Iran's exports averaged 2.5mn b/d in January-May.

Trump's decision to reimpose sanctions on Iran has contributed to higher oil prices globally, an analysis by the US Energy Information Administration (EIA) shows. But Bolton today downplayed the effect on oil markets.

"One of the things this administration has done that (former president Barack Obama's) administration did not do was to encourage producers to alter their production to make up for the lost output in Iran," Bolton said. "It has been an interesting exercise, but we have been able in some cases to find alternative purchases for the buyers of Iranian oil," he said, without providing details.

Russia and Saudi Arabia increased production since June. Opec and its non-Opec allies will produce as much as necessary to meet global demand and offset any supply disruptions, Saudi oil minister Khalid al-Falih says.

Growing US output and a lower oil import bill have enabled the administration to implement stricter restrictions than were imposed between June 2012 and January 2016 under Obama. These factors also influenced the layout of sanctions in the run-up to 5 November.

"It is important to remember the context in which the Obama administration negotiated (sanctions exemptions) in 2012," given oil prices above USD 100/bl amid a presidential re-election campaign, said Richard Goldberg, a former congressional aide who helped craft Iran sanctions legislation.

"Their strategy was to announce exemptions early to show that the US was willing to provide exemptions and demonstrate that other countries are reducing purchases from Iran," said Goldberg, a senior fellow at the Washington-based advocacy group Foundation for Defense of Democracies, which backs the administration's Iran policy.

By contrast, Trump's administration—partly as a negotiating tool—has kept the scope of waivers unclear, even as the sanctions deadline approaches. It also has yet to clarify the scope of possible financial sanctions and to explicitly exclude condensate from US sanctions.

"Ultimately the Iranians are evaluating what is going to happen on 5 November, how sanctions will be enforced" and what concessions on financial sanctions the EU has managed to extract from Washington, Goldberg said.

Forcing Iranian exports to zero remains the primary objective, Bolton said. "The president said unmistakably our goal is maximum pressure. There has to be a fundamental change in the behavior of the Iranian regime."

Photo Credit: IRNA

Iran's Options to Face Down US Oil Sanctions

Iran faces a potentially crushing loss of oil exports when US sanctions return in November, but the impact could be blunted by its experience of working around embargoes.

When Iran faced its toughest international sanctions between 2012 and 2015, analysts say it found a number of creative solutions, from repainting and renaming ships to switching off their tracking devices.

Those tactics have continued.

"We find those tankers quite often, leaving and entering Iran in a covert fashion with their transponder turned off," said Samir Madani, co-founder of TankerTrackers.com, which monitors the oil trade.

"We spot them through satellites. I'd say several vessels a month," he told AFP.

Analysts expect such behavior to ramp up when US sanctions on Iran's oil industry return on November 5, following Washington's withdrawal from the nuclear deal in May.

US pressure has already caused a 24 percent drop in Iran's sales between May and August, according to Bloomberg.

The big surprise has been cuts by Asian buyers, which analysts expected to resist US pressure, notably a 35 percent drop by China and 49 percent by India, according to the Eurasia Group consultancy.

"We underestimated the degree to which New Delhi and Beijing would concede to Washington's demands," it said in a briefing note.

Eurasia Group said wider geopolitics are at play: India is looking to deepen strategic ties with the US, while China may wish to avoid a fresh spat when it is already embroiled in a bitter trade dispute with Washington. 

Iran was exporting 2.7 million barrels of oil per day in May, but that has already fallen to 2.1 million.

Overall, Eurasia Group predicts the country's sales will fall by a further 0.9 million barrels per day to 1.2 million by November.

That would mean a loss of some USD 2-2.5 billion a month, at current prices.

'Cat and Mouse'

But analysts say Washington's goal of reducing Iran's oil sales to zero is unrealistic.

Iran has the world's fourth-largest reserves, and many countries—particularly in Asia—rely on its supplies and have refineries designed for its particular flavor of heavy crude.

And Tehran has many tried and tested ways to keep oil flowing.

It has already increased price discounts since May, worth around USD 10-15 million a month to large importers like China and India compared with last year, said Wood Mackenzie, a consultancy.

"Buyers can pay in kind, trade in other currencies, or extend credit—even keep the money in an escrow account in Switzerland and wait until these sanctions are over. India had a deal like that last time," said Madani.

If Iran can get its oil to a friendly port, it could be blended with oil from elsewhere and resold, said Thijs Van de Graaf, assistant professor for international politics at the University of Ghent.

"Iran played a cat and mouse game last time... and will probably do so again," he told AFP.

It also has more aggressive options, with President Hassan Rouhani recently restating an old threat to block the vital Strait of Hormuz through which around a third of the world's seaborne oil passes every day.

Rouhani announced last week that Iran was moving its main oil terminal out of the Gulf to a port in the Oman Sea, so that its tankers would no longer need to pass through the strait, giving it more scope to disrupt supplies.

Pressure on Europe

Iran says it will not accept major drops in its oil sales, putting pressure particularly on Europe, which was buying more than a fifth of its oil, to resist US demands.

The EU strongly opposed Washington's decision to scrap the nuclear deal and has vowed to introduce a package of measures to protect trade with Iran.

But European firms are highly vulnerable to US sanctions.

Shipping, banking and insurance firms have already backed out of Iran and oil purchases are down by 35 percent.

"If we cannot continue (the previous) level of sales even after the European package has been implemented, then that is a red line for us," warned deputy foreign minister Abbas Araghchi on state television.

Supreme leader Ayatollah Ali Khamenei warned recently that Iran would "set aside" the nuclear deal if it was no longer receiving the economic benefits it promised.

One slight upside for Iran is that oil prices are already rising due to the squeeze caused by the looming US sanctions.

Some analysts predict prices could exceed USD 100 per barrel, from the current level of around USD 70.

The United States has pressured its ally Saudi Arabia to pump more oil to compensate for the loss of Iranian supplies.

"In theory, it is perfectly possible to have an increased price of oil that entirely compensates for the loss of exports. That's why the US-Saudi relationship is key here," said Van der Graaf.

Photo Credit: IRNA

Iran Offers Discount Oil to Asia

Iran is selling oil and gas at a discount to Asian customers as it prepares for the return of US sanctions, state news agency IRNA reported on Monday. 

The "informed source" in Iran's oil ministry did not give details of the discount, but sought to downplay the move as common industry practice. 

"Discount is part of the nature of the global markets being offered by all oil exporters," the source told IRNA. 

Bloomberg reported on Friday that the state-run National Iranian Oil Company was reducing official prices for September sales to Asia to their lowest level in 14 years, compared with Saudi crude. 

The United States will seek to block Iran's international oil sales from November 5, when the second phase of sanctions are reimposed as part of Washington's withdrawal from the 2015 nuclear deal. 

Several key buyers, including China and India, who account for roughly half of Iran's sales, have said they are not willing to make significant cuts to their energy purchases from Iran. 

But analysts predict Iran could still see its oil sales drop by around 700,000 barrels per day from their current level of around 2.3 million. 

Much will depend on the European Union, which has vowed to resist US sanctions on Iran, but whose companies and financial institutions are more vulnerable to US financial pressure than their Asian counterparts. 

French energy giant Total has already said it is pulling out of its multi-billion-dollar investment project in the South Pars oil field in southern Iran as a result of the renewed sanctions.

Photo Credit: IRNA

US's Haley Tells India to 'Rethink' Iran Ties

The US Ambassador to the UN Nikki Haley on Thursday urged India to reconsider its ties to Iran, one of its key energy suppliers, as fresh US sanctions on buyers of Iranian oil loom.

Washington has stepped up pressure on major Iranian customers to stop importing its oil, warning no trading partner will be exempt from new economic sanctions when they bite from November 4.

India imports the overwhelming majority of its oil and Iran is the third-largest supplier to the nation of 1.25 billion.

Haley said she understood India "can't change its relationship with Iran in a day" but said she used a meeting with Prime Minister Narendra Modi in New Delhi to encourage a reassessment.

"I also think for the future of India, and the future of being able to get resources and who they're dependent on, I would encourage them to rethink their relationship with Iran," she told broadcaster NDTV after an address in New Delhi.

"I think as a friend, India should also decide is this a country that they want to continue doing business with."

US President Donald Trump withdrew the United States from the Iran nuclear deal last month, re-imposing sanctions that had been suspended in return for curbs on Tehran's nuclear program.

US officials said Washington would be asking major Iranian customers to reduce their oil imports to zero, and warned no exemptions would be made when the sanctions were enforced.

Before the 2015 nuclear deal between Iran and six major powers, various buyers of Iranian oil including India had waivers or exemptions to US sanctions.

India's foreign ministry said Thursday however that the Islamic republic was a "very traditional partner" that enjoyed "historical, civilizational linkages" to India.

"She has her views, and ours views on Iran are very clear," said ministry spokesman Raveesh Kumar of Haley, whose two-day visit to India also included visits to holy sites in the Indian capital.

"We will take all necessary steps, including engagement with relevant stakeholders to ensure our energy security." 

No Rift

Haley's visit coincided with revelations that a long-anticipated meeting between US and Indian defense and foreign ministers, known as a 2+2, had been delayed for a second time.

The UN ambassador played down rumors of a rift, saying the meeting would be rescheduled "very soon" and was "an important sign of how much our security and defense cooperation has grown in recent years".

Washington has put new emphasis on its military ties to New Delhi and its regional role as a counter to China's rise.

But it could still fall foul of US sanctions imposed last August threatening sanctions on any country doing business with Russia's defense and intelligence sectors.

India, the world's top defence importer, had been in talks with Russia to buy missile systems when the sanctions were announced and New Delhi has said the embargo would not affect ties to Moscow.

Haley said Thursday that "anybody, any country, that does business with Russia... there are sanctions."

Photo Credit: Niki Haley Twitter

India to Ignore US Sanctions on Iran, Venezuela: Minister

India will keep trading with Iran and Venezuela despite the threat of fallout from US sanctions against the two countries, Foreign Minister Sushma Swaraj said Monday.

Swaraj, asked at a news conference whether US action against Iran and Venezuela would damage India, said the country would not make foreign policy "under pressure". 

US President Donald Trump this month withdrew from the Iran nuclear deal and ordered the reimposition of sanctions suspended under the 2015 accord. 

Washington has also tightened sanctions against Venezuela over the controversial re-election of President Nicolas Maduro.

Both countries are key oil suppliers to India and the United States has warned that foreign companies which deal with Iran could themselves be punished.

But Swaraj said New Delhi did not believe in "reactionary" policies and would not be dictated to by other countries.

"We don't make our foreign policy under pressure from other countries," she told a news conference.

"We believe in UN sanctions but not in country-specific sanctions."

Swaraj's comments came just before a meeting with her Iranian counterpart Mohammad Javad Zarif in New Delhi.

Bilateral trade between India and Iran amounted to USD 12.9 billion in 2016-17. India imported USD 10.5 billion worth of goods, mainly crude oil, and exported commodities worth USD 2.4 billion.

India has other interests in Iran, in particular a commitment to build the port of Chabahar on the Gulf of Oman.

The port is being touted as a way for India to establish trade routes that bypass rival Pakistan. Media reports have speculated India could revive a rupee-rial payment arrangement with Iran to shield exporters from the heat of US sanctions.

Swaraj also said India would continue trading with Venezuela, but there was no plan to use its local cryptocurrency in oil trade. 

"We cannot have any trade in cryptocurrency as it is banned by the Reserve Bank of India. We will see which medium we can use for trade," she said.

Photo Credit: Wikicommons