The US will send its top diplomat to India today for the inaugural “two-plus-two dialogue”, a result of PM Narendra
The US will send its top diplomat to India today for the inaugural “two-plus-two dialogue”, a result of PM Narendra Modi’s 2017 agreement with President Donald Trump for closer defence and security cooperation.
Mike Pompeo, Jim Mattis and their Indian counterparts are expected to focus on the secondary penalties that will apply to Indian firms for trading with US adversaries like Iran. Penalties include blocking any access to US credit or freezing US operations of a company trading with Iran.
This affects India, which imported an average of 500,000 barrels of Iranian oil per day over the past two years, making Iran the country’s third largest import market. As the world’s fastest growing major economy, cutting all Iranian oil imports will have energy security implications for India; its developing economy is energy-hungry, with oil consumption growing 4.9% per year between 2005 and 2015.
Consequently, New Delhi’s official position has been to continue imports from Iran regardless of US sanctions—likely to be imposed on hydrocarbons on November 4. However, that official position is likely to change because Indian imports collapsed from 787,000 barrels per day in July to only 50,000 by mid-August, as Indian private refiners cut purchases. Ultimately, India’s oil imports may collapse regardless of policy as India’s private refineries vote with their feet.
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