India, the second-largest consumer of Iranian oil after China, said it was now importing 14 million tonnes of crude from Iran and has "substantially" reduced its imports from the country as the deadline to comply with Western sanctions against Tehran looms.
If countries are unable to make significant cuts, their financial institutions could be blocked from US markets, under a strict new sanctions law designed to thwart Iran's nuclear ambitions. "Where Iran is concerned, we are buying Iran oil," Indian Finance Minister Pranab Mukherjee told reporters on Sunday after a group of 20 finance minister meetings in Washington. "In terms of percentage it has been reduced substantially, because currently I think our imported oil is 160, 170 million tonnes, so 14 million is out of that 170 million," he said. The pending US penalties and a European embargo on Iranian oil starting from July has helped push oil prices above $110 a barrel.
Mukherjee said the high oil prices has "caused immense problems" to the Indian economy. "When I presented the budget of the last year, I assumed the average oil price would be $90- $90-95," he said. "But actually we had to bear out average price of $115 per barrel for Brent crude."