ICJ orders US to ease Iran sanctions; India to continue purchasing crude oil from Iran

Oct 07, 2018 (LBO) – India will buy a total of 9 million barrels of oil from Iran in November, foreign media reported yesterday, citing an industry source, despite US sanctions on Tehran to return early next month. In May, Trump pulled the US out of the Iran nuclear deal despite objection from the other signatories, the UK, Russia, Germany, China, and France, re-imposing sanctions lifted under the deal.

India is Iran’s second-largest single oil customer after China and was expected to cut back on Iranian oil purchases following US sanctions. India, however, wants to keep importing oil from Iran, because Tehran offers discounts and incentives for them at a time when the Indian government is struggling with higher oil prices and a weakening local currency.

Last week, India reduced gasoline and diesel prices to give relief to consumers against rising global crude prices caused by uncertainty over US sanctions on Iran and OPEC's decision to raise output. But the United States continues to insist that it expects Iranian oil buyers to bring their purchases down to zero. US Secretary of State Mike Pompeo last month said that on November 4th the sanctions against Iran will be enforced and that the US will consider waivers for countries that bring their Iranian oil purchases down to zero. Meanwhile, the International Court of Justice ordered the US on Wednesday to ease some sanctions against Iran, including those related to the supply of humanitarian trade, food, medicine and the safety of civil aviation. Sri Lanka, a country closely watched by the United States is expected to raise oil prices again by Wednesday midnight under the fuel price formula in line with increasing global prices.