India and other major Iranian oil importing countries have got six months relief from reducing their import after the Islamic Republic agreed to curb parts of its disputed nuclear programme under a landmark deal.
"What the Joint Plan of Action provides is that we'll pause efforts to further reduce Iran's crude oil sales to Iran's existing customers so that, what had been the requirement to continue to significantly reduce, will be essentially held in abeyance during the six-month period of this agreement," a senior administration official said today.
India had slashed import of crude oil from Iran by over 26.5 per cent in the financial year ended March 31, 2013 as US and European sanctions made it difficult to ship oil from the Persian Gulf nation.
"They cannot increase their amount of oil that they're importing, but they don't need to reduce," the official said on condition of anonymity.
His comments came hours after Iran and six world powers reached an agreement under which Tehran agreed to curb parts of its nuclear programme for six months in exchange for modest relief from international sanctions. Iran would start scaling back its nuclear programme from January 20.
In November last year, Iran signed a six-month Joint Plan of Action with P5+1 group - the US, UK, Russia, China, and France plus Germany - under which it agreed to roll back parts of its nuclear programme in return for the release of billions of dollars in frozen assets and modest relief from sanctions.
"That will hold Iran's oil exports at around a million barrels per day, which is down about 60 per cent from where it began at the beginning of 2012 when we embarked on the effort to drive down Iran's oil sales, driving it down to about 2.5 million barrels today - a day to now about 1 million barrels per day," the official explained when asked if the countries importing oil from Iran would have to continue to reduce it further to avoid American sanctions in this regard.
According to the official, once the IAEA has confirmed Iran is implementing its commitments, in return the P5+1 has committed to do a series of measures on the first day of the implementation.
This includes suspend the implementation of sanctions on Iran's petrochemical exports and Iran's imports of goods and services for its automotive manufacturing sector; and suspend sanctions on Iran's import and export of gold and other precious metals with significant limitations that prevent Iran from using its restricted assets overseas to pay for these purchases.
