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1. It is not clear how India would replace the bulk of petroleum products it buys from Iran; international oil markets are relatively tight. India’s monthly imports from Iran are down slightly over the two previous years, but it is hard to see how they could go much lower unless Indian over-all petroleum demand feel (unlikely) or unless the world suddenly produced 2 million barrels a day more than the world demand, also at the moment unlikely.
2. The Indian manufacturing lobby sees an enormous opportunity for India in stepping into the vacuum left in Iranian imports by the US and EU sanctions.
3. Muslim voters are something like 12% of the Indian electorate, and the ruling Congress Party in particular is beholden to the Muslim vote. Indian Muslims generally do not approve of the US and Israeli attempt to isolate Iran.
4. India’s rivalry with Pakistan impels it to seek regional allies to offset Pakistan’s soft power in the Muslim world.
5. India’s economy is sufficiently big and diverse that it can probably arrange for some firms to deal with the US and other firms to deal with Iran, avoiding the worst impact of possible US Treasury Department sanctions. Moreover, Washington may be reluctant to follow through on its threats against India in this regard, since the US has wanted to play India off against China and would be deprived of that chip in global politics if relations soured with New Delhi.
China is buying crude oil from Iran using its currency the yuan, an Iranian diplomat has said.
Oil transactions are usually settled in dollars but US sanctions make it difficult for Iran to accept payments in the US currency.
Iran is using the revenue to buy goods and services from China, Mohammed Reza Fayyad, Iran's ambassador to the United Arab Emirates, confirmed.
DUBAI (Reuters) - Iran has reached agreements with European refiners to sell some of its oil through a private consortium, an official said on Saturday, a move designed to circumvent sanctions intended to put pressure on Tehran to halt its disputed nuclear program.
The head of the oil products exporters' union said the agreement between the exporters' union, Iran's central bank, and the oil ministry would get round a European Union ban on shipping insurance for tankers carrying Iranian oil, though he gave few details and did not name the refiners involved.
The EU put into effect a ban on the importation, purchase, or shipping of Iranian oil on July 1, and the Islamic Republic will see its oil exports fall by more than 50 percent this month from last year's regular levels, costing it billions of dollars a month in revenue.
"There have been discussions with European refiners, and a final agreement has even been reached," said Hassan Khosrojerdi, the exporters' union head, according to Iran's Mehr News Agency.
"In accordance with the agreement, it is planned that 20 percent of Iran's oil exports will go through this private consortium." …
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