In November, the US had granted a six-month waiver to India, China, Greece, Italy, Taiwan, Japan, Turkey and South Korea to continue importing oil from Iran.
In May last year, the US had brought back sanctions on Iran after withdrawing from the Iran nuclear deal which was struck in 2015.
We have to play a very deft diplomacy here. The Americans will have to be told, said Arvind Gupta, Director at the Vivekananda International Foundation and former Deputy National Security Advisor.
Iran is very important (to India). It is very important for us to access to Central Asia. Afghanistan is very important (too). America knows about it, he said.
The US had told India and other countries to cut oil imports from the Gulf nation to "zero" by November 4 or face sanctions but had granted a six-month waiver.
Gupta made the comments during his talk at the Institute of South Asian Studies, a think-tank at the National University of Singapore here on Thursday while discussing his book How India Manages its National Security.
He pointed out that the US was putting so much focus on India for its Indo-Pacific strategy.
I think we will be able to do that tight rope walking. India has been here before, he highlighted, referring to the current scenario of managing relationship with Iran and America.
Iran likes India, he pointed out, highlighting the close trade and diplomatic relationship between the two countries on crude oil imports being based on rupee transactions and India's investment in that country.
It is how we maintain our relationship with Iran and how India shows its strategic autonomy of decision making, he said.
Replying to a question on Indian refiners' dependency on heavy sweet crude oil from Iran and Venezuela, he said crude oil is widely available in the international market and Indian refineries have made adjustment to the refining processes.
Global oil prices are off highs on assurances of sufficient supply to compensate for a fall in Iranian exports, along with a surprising increase in US oil inventories, said Singapore's DBS Bank in its daily market report on Thursday.
Price movements are, however, likely to be volatile amidst a halving in Venezuelan oil exports between January and April 2019 due to a political crisis at home, while the OPEC major Saudi Arabia remains in favour of supply curbs, said DBS.
A break above USD 75/barrel in oil is a risk for the Indian markets, he added.
India, which is the second biggest purchaser of Iranian oil after China, had agreed to restrict its monthly purchase to 1.25 million tonne or 15 million tonne in a year (300,000 barrels per day), down from 22.6 million tonne (452,000 barrels per day) bought in the 2017-18 financial year.
The world's third biggest oil consumer, India meets more than 80 per cent of its oil needs through imports. Iran is its third largest supplier after Iraq and Saudi Arabia and meets about 10 per cent of its total needs.