India's oil ministry has asked refiners to prepare for a 'drastic reduction or zero' imports of Iranian oil from November, two industry sources said, the first sign that New Delhi is responding to a push by the United States to cut trade ties with Iran.
India has said it does not recognise unilateral restrictions imposed by the United States, and instead follows UN sanctions. But the industry sources said India, the biggest buyer of Iranian oil after China, will be forced to take action to protect its exposure to the US financial system.
India's oil ministry held a meeting with refiners on Thursday, urging them to scout for alternatives to Iranian oil, the sources said.
"(India) has asked refiners to be prepared for any eventuality, since the situation is still evolving. There could be drastic reduction or there could be no import at all," said one of the sources, who has knowledge of the matter.
Indian oil minister Dharmendra Pradhan told reporters in Mumbai that the country would attend to its interests while deciding on oil imports.
"We know (that) to have a healthy energy mix, we can get oil from anywhere. The rest depends on geopolitics, and those decisions will be taken based on the situations," he said. "We will go by our interests. When we decide anything on Iran, we will inform you."
During the previous round of sanctions, India was one of the few countries that continued to buy Iranian oil, although it had to reduce imports as shipping, insurance and banking channels were choked due to the European and US sanctions.
The source said this time the situation is different.
"You have India, China and Europe on one side, and US on the other... At this moment we really don't know what to do, but at the same time we have to prepare ourselves to face any eventuality," said the source.
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