India’s Oil Minister Dharmendra Pradhan has conveyed the message that his country would continue to buy Iranian oil to some extent. However, India has not yet worked out a payment system for continued purchases of crude oil from Iran.
Recent reports have it that India has discussed ditching the U.S. dollar in its trading of oil with Russia, Venezuela, and Iran, instead settling the trade either in Indian rupees or under a barter agreement.
India is Iran’s second-largest single oil customer after China and was expected to cut back on Iranian oil purchases, but it is unlikely to cut off completely the cheap Iranian oil that is suitable for its mega refineries.
India wants to keep importing oil from Iran, because Tehran offers some discounts and incentives for Indian buyers at a time when the Indian government is struggling with higher oil prices and a weakening local currency that additionally weighs on its oil import bill.
But the United States continues to insist that it expects Iranian oil buyers to bring their purchases down to zero.
Oil Price.org / ABC Flash Point Trade News 2018.