You are currently viewing Iran Aims to Resume Crude Oil Supply to India, Expand Trade Relations

Iran Aims to Resume Crude Oil Supply to India, Expand Trade Relations

Prime Highlights:

India is the largest oil importing country after China and therefore significantly depends on crude oil imports.

Iran is now actively seeking ways to resume crude oil exports to India while diversifying its trade relations, and it is now focusing on the strengthening of cooperation in the petrochemical sector through the Chabahar port.

Key Facts:

Iran wants to restart its crude exports to India, which had been banned in 2019, following US sanctions imposed during the Trump administration.

Iran wants to increase its trade with India in the petrochemical sector.

India and Iran have continued developing the Chabahar port, India has also been managing the Shahid Beheshti terminal under a 10-year agreement.

Key Background:

Iran has ventured to revive the exportation of crude oil to India and redefine its trade ties, with increased collaboration in the petrochemical area through the Chabahar port. According to a ranking Iranian government official, this step must address the blocking of Iranian crude oil supply to India, which was stopped in mid-2019 following the imposition of U.S. sanctions by the Trump administration. This, according to him, is very important as it differs between sanctions on Iran and Russia, in which India could purchase oil from Russia even if the West sanctioned it.

Chabahar port, situated on Iran’s southern coast, is a strategic location that will be used for the expansion of India-Iran trade. The port is exempt from U.S. sanctions, which makes it an attractive site for collaboration in sectors such as petrochemicals. India and Iran have made significant strides in developing the port, with India signing a 10-year agreement to operate the Shahid Beheshti terminal. Both countries are eager to expand this cooperation, which would significantly strengthen their economic ties.

One area focused was the ever-increasing mutual concerns, particularly with regard to regional terrorism and West Asia’s instability, especially within Syria. Regarding India and Iran, the interest lies in joint terrorism-fighting endeavors. To date, fighting terrorism stands out as the biggest challenge ahead due to incessant tension among neighbors. Both states will benefit with the increase of cooperation between each other on these grounds.

In a wider geopolitical dimension, he expressed worry that the issue is being internationalized, noting that the matter should be settled to realize peace in the region. The official reiterated that an independent Palestinian state is part and parcel of the foreign policy pursued by Iran, which has always been the mainstay. Iran wants to rekindle and enhance its trade relations with India,

particularly in energy and petrochemicals, and deepen regional cooperation to face common security threats.