India's oil import from Iran will not be immediately impacted by US sanctions

The US decision to reinstate financial sanctions on Iran will not impact India's oil imports from the Islamic Republic as long as European countries don't follow suit, officials said today.

India pays its third largest oil supplier in Euros using European banking channels and unless these are blocked, imports will continue, they said.

US President Donald Trump yesterday announced that the US will withdraw from the landmark 2015 accord to curb Iran's nuclear program and reinstate financial sanctions on the Persian Gulf nation.

Soon after the announcement, oil prices rebounded to trade at the highest level since 2014 with Brent crude oil climbing 2.5 per cent to USD 76.75.

"Immediately there will be no impact but we have to wait and watch how other nations particularly the European block, react," said A K Sharma, Director (Finance) of Indian Oil Corp (IOC), the country's largest oil firm.

If the European Union (EU) were to continue status quo and not re-impose sanctions, Iranian supplies to India will continue unhindered, he said.

But paying Iran for the oil India buys would become difficult in case European countries join the US and impose financial sanctions and block banking channels, he said.

French President Emmanuel Macron, who personally lobbied Trump to remain in the deal during a state visit to Washington last month, said: "France, Germany, and the UK regret the US decision to leave the JCPOA."