India today held an emergency meeting to consider ways to ensure uninterrupted crude oil supply from Iran in the wake of tougher US sanctions targeting banks that settle oil trades with the Central Bank of Iran.
National Security Advisor Shivshankar Menon chaired a meeting of officials from the Ministries of Finance,Petroleum and External Affairs and the Reserve Bank of India after indications from Turkeys state-run Halkbank that it would have to stop settling payments on behalf of Indian companies.
Immediately after the meeting,the Petroleum Ministry directed the five refining companies that import Iranian crude to gather on Monday to discuss oil imports from Iran and related issues. The five together imported 18.50 million tonnes of crude oil in fiscal 2010-11.
Officials said the issue of Tehran blocking oil supplies through the Strait of Hormuz through which about a third of global seaborne oil exports transit did not come up at todays meeting.
However,they said that if that were to happen,Indias annual crude supplies of 94.82 million tonnes from six Middle East nations would get hampered. That would amount to 58 per cent of India total annual consumption of 163.59 million tonnes.
It would also hinder the 7.5 million tonnes of liquefied natural gas that Qatar ships through tankers each year to India,they said.
Tensions between Iran and the West have spiralled with Tehran threatening last week to stop the oil and gas movement through the Strait if sanctions were imposed. But that did not stop the US to order sanctions against crude sales on Sunday with the EU giving in-principle support on Wednesday.
Until now,sanctions were directed against banks financing Irans oil and gas production.
The new sanctions come with a wide range of exemptions and a grace period of six months. The EU is also debating the number of months it would wait to implement the sanctions and if long-term supply deals should be allowed to be completed.