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Iran ending oil exports to India
By M K Bhadrakumar – July 19, 2011
Iran ending oil exports to India - Indian Punchline
Developments in the oil market are invariably big news and the Iranian decision to cut off oil exports to India with effect from August 1 unless India cleared the massive arrears in payment to the tune of 5 billion dollars is splashed all across business pages raging from Chinese dailies to Washington Post. Tehran is being forced to act against its wishes. It is plain to see that Delhi is once again playing hide-and-seek as it did over the Iran gas pipeline project — professing attention while actually doing nothing. True to a pattern, Indian diplomacy will now seek to play the ‘Iran card’ vis-a-vis US to extract concessions elsewhere. The outcome of the US-India strategic dialogue on Monday may give some clue. US is apparently encouraging Sunni Saudi Arabia to replace Shi’ite Iran and make up the deficit in India’s oil supply. But will the Wahhabi oil match the Iranian ’sweet’ crude?
The impending break-up of longstanding India-Iran oil trade comes at a time when despite the US pressure, buyers from various countries are merrily buying from Iran. Iran’s exports of oil, gas and petrochemical products shot up by 30% in the last quarter. A Turkish company entered into a new gas deal with Iran only yesterday — despite Turkey being a steadfast NATO ally of the US. China and Turkey celebrated the 40th anniversary of the establishment of diplomatic ties on Saturday by signing 4 billion dollar worth business deals. Trade is expected to touch 40 billion dollars by end-2011 (India’s trade will plummet to some 2 billion dollars with Iran if oil is taken out of it) — and there is talk of boosting the China-Iran trade volume to 100 billion dollars. In comparison with Turkey or China, what could be that India seems to lack?
The termination of Iran-India oil trade further aggravates the setback to the bilateral ties following India’s IAEA vote in 2007. As the last round of foreign-secretary level talks in Tehran recently revealed, India-Iran ties are in a mess. The geopolitical consequences will be quite negative. Iran is India’s gateway to Afghanistan and Central Asia and will remain so for the foreseeable future until a dramatic change in the climate of India-Pakistan ties happens. At a time when regional security scenario looks highly precarious, India’s capacity to influence the developments over Afghanistan will be impaired unless it has a good understanding with Iran. Pakistani president Asif Zardari visited Tehran twice during the past 3-week period. The Iran oil affair exposes that Indian diplomacy is episodic.
By M K Bhadrakumar – July 19, 2011
Iran ending oil exports to India - Indian Punchline
Developments in the oil market are invariably big news and the Iranian decision to cut off oil exports to India with effect from August 1 unless India cleared the massive arrears in payment to the tune of 5 billion dollars is splashed all across business pages raging from Chinese dailies to Washington Post. Tehran is being forced to act against its wishes. It is plain to see that Delhi is once again playing hide-and-seek as it did over the Iran gas pipeline project — professing attention while actually doing nothing. True to a pattern, Indian diplomacy will now seek to play the ‘Iran card’ vis-a-vis US to extract concessions elsewhere. The outcome of the US-India strategic dialogue on Monday may give some clue. US is apparently encouraging Sunni Saudi Arabia to replace Shi’ite Iran and make up the deficit in India’s oil supply. But will the Wahhabi oil match the Iranian ’sweet’ crude?
The impending break-up of longstanding India-Iran oil trade comes at a time when despite the US pressure, buyers from various countries are merrily buying from Iran. Iran’s exports of oil, gas and petrochemical products shot up by 30% in the last quarter. A Turkish company entered into a new gas deal with Iran only yesterday — despite Turkey being a steadfast NATO ally of the US. China and Turkey celebrated the 40th anniversary of the establishment of diplomatic ties on Saturday by signing 4 billion dollar worth business deals. Trade is expected to touch 40 billion dollars by end-2011 (India’s trade will plummet to some 2 billion dollars with Iran if oil is taken out of it) — and there is talk of boosting the China-Iran trade volume to 100 billion dollars. In comparison with Turkey or China, what could be that India seems to lack?
The termination of Iran-India oil trade further aggravates the setback to the bilateral ties following India’s IAEA vote in 2007. As the last round of foreign-secretary level talks in Tehran recently revealed, India-Iran ties are in a mess. The geopolitical consequences will be quite negative. Iran is India’s gateway to Afghanistan and Central Asia and will remain so for the foreseeable future until a dramatic change in the climate of India-Pakistan ties happens. At a time when regional security scenario looks highly precarious, India’s capacity to influence the developments over Afghanistan will be impaired unless it has a good understanding with Iran. Pakistani president Asif Zardari visited Tehran twice during the past 3-week period. The Iran oil affair exposes that Indian diplomacy is episodic.
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