India has dispatched a senior-level delegation to Europe to assess options of continuing trade with Iran after the US decided to impose fresh economic sanctions on the Persian Gulf nation.
The delegation comprising of officials from ministries of finance, petroleum and external affairs will visit France, Germany, Britain and Brussels to meet government officials and bankers, sources with direct knowledge of the development said.
Iran is India's third biggest supplier of crude oil after Iraq and Saudia Arabia. It currently settles oil payments in euros through Germany's EIH bank. The payment route can continue to function as long as Europe does not join US in re-imposing sanctions on Iran.
Oil Minister Dharmendra Pradhan refused to discuss impact of sanctions on India's trade with Iran, saying it is "too early to say anything".
India, he said, is waiting and watching the situation that is developing.
US President Donald Trump last month announced that the US will withdraw from the landmark 2015 accord to curb Iran's nuclear programme and reinstate financial sanctions on the Persian Gulf nation.
If the European Union (EU) were to continue status quo and not re-impose sanctions, Iranian supplies to India will continue unhindered, sources 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, they said.
Iran and the P5+1 (the five permanent members of the United Nations Security Council - China, France, Russia, the UK, US - plus Germany), and the EU had in Vienna signed the Joint Comprehensive Plan of Action (JCPOA) on July 14, 2015.
JCPOA provided for Iran curbing its nuclear programme in return for the lifting of financial sanctions.
India has said that it would only honour sanctions imposed by the United Nations but not follow individual country sanctions.
Iran supplied 18.4 million tonne of crude oil during April 2017 and January 2018 (first 10 months of 2017-18 fiscal).
Iran was India's second biggest supplier of crude oil after Saudi Arabia till 2010-11 but western sanctions over its suspected nuclear programme relegated it to the 7th spot in the subsequent years. In 2013-14 and 2014-15, India bought 11 MT and 10.95 MT, respectively from it.
Sourcing from Iran increased to 12.7 MT in 2015-16, giving it the sixth spot. In the following year, the Iranian supplies jumped to 27.2 MT to catapult it to the third spot.
Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 90 days of credit for purchases, at least thrice the amount of time given by other producers.
During the first round of sanctions when EU joined the US in imposing financial restrictions, India initially used a Turkish bank to pay Iran for the oil it bought but beginning February 2013 paid nearly half of the oil import bill in rupees while keeping the remainder pending opening of payment routes. It began clearing the dues in 2015 when the restrictions were eased.
Besides, New Delhi sought to get around the restrictions by supplying goods including wheat, soybean meal and consumer products to Iran in exchange for oil.
Back in 2012, EU put restrictions on insurance of Iranian oil and ships carrying them. To get around the problem, Iran supplied oil in its own tankers.
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