India, the world's third-biggest oil importer, plans to buy 9 million barrels of Iranian oil in November, according to two industry sources. The move indicates that India will continue purchasing crude from Iran despite U.S. sanctions targeting the Iranian oil industry that are expected to be enacted Nov. 4.
"Refiners have placed November nominations to lift 1.25 million tons (about 9 million barrels) of oil from Iran," one source said.
The Indian Oil Corporation will take 6 million barrels of Iranian oil while Mangalore Refinery and Petrochemicals Ltd. will take 3 million barrels, the source told Reuters.
In an effort to pressure Iran to discontinue its involvement in conflicts across the Middle East and return to the negotiating table to discuss its ballistic missile program, the U.S. plans to impose sanctions targeting Iran's oil sector on Nov. 4. This will be the second round of sanctions the U.S. will have re-imposed since pulling out of the 2015 nuclear accord between Iran and six world powers, under which Iran enjoyed substantial sanctions relief.
"India is continuing with its relationship with both its key energy partners, Iran and the U.S.," the second source said.
Both sources declined to be identified as they were not authorized to speak to the media. Indian Oil and Mangalore Refinery did not immediately respond to a request for comment.
A U.S. government official, also speaking on condition of anonymity, said the Trump administration was "in the midst of an internal process" of considering waivers for countries that are reducing imports of Iranian crude.
Last month, during a trip to India, U.S. Secretary of State Mike Pompeo said the Trump administration would consider waivers for Iranian oil buyers such as India, but that they must eventually bring the imports to zero.
Indian refiners will import around 10 million barrels of Iranian oil in October, and its November shipments are expected to be lower.
In the previous round of sanctions, enacted between 2012 and 2015, India continued to buy Iranian crude, although it had to cut purchases significantly to protect its wider exposure to the U.S. financial system.
India's foreign minister said in May that the country abides only by sanctions imposed by the United Nations and not those imposed by any other country.
With the European Union considering the establishment of a "special purpose vehicle" before November to facilitate trade with Iran, India hopes to find a way to settle payments to Iran.
"Previously there was no European channel," the second source said. "This time Europe is not working with the U.S., so we intend to evolve a mechanism."
India, Iran's top client after China, maintains close diplomatic ties with Iran, where it is building a strategic port that is expected to be operational by 2019. At the same time, India is closely working with the U.S. to further its strategic interests there.
"It is still early to say how India will settle its trade with Iran," the first source said.
