x Abu Dhabi, UAEWednesday 26 July 2017

Needing fuel, India disdains Iran sanctions

India is ignoring sanctions against Iran, but what else can a country which must have fuel be expected to do? Other countries, including Gulf states, can help India answer that question.

A serious interruption of energy supply is among the biggest national-security concerns on any country's worry list.

A sudden fuel shortfall can cripple any economy in days. The repercussions can cascade, slowly or quickly, into problems of public order and even public health.

So it would be unfair to blame countries that rely on Iranian oil, such as India, for being reluctant to forego this source of energy. And yet the trade and banking sanctions imposed on Iran by the world community become less effective if they're ignored by a country of India's size. Sanctions, while clumsy, may be the only tool available to steer Iran away from its ill-advised nuclear programme - while reducing the risk of war in the process.

India - which gets about 12 per cent of its oil from Iran - has indeed disdained the sanctions, although the government of Prime Minister Manmohan Singh says it does not want a nuclear-armed Iran. In fact, the Indian government has helped work out a deal by which oil importers can pay Iran in rupees, now that US-dollar payments have been disrupted by banking sanctions. Also, a big Indian export mission will go to Iran next month, seeking to expand trade. Rahul Khullar, India's commerce minister, says sanctions create a "business opportunity" for his country.

These moves have rankled the US, which has been working hard in recent years to improve ties with New Delhi. And India's policy is clearly out of step: even China, which systematically opposes all boycotts, has quietly reduced its oil purchases from Iran for three months in a row, as the two countries haggle over payments and price.

The obvious suggestion to win India's support for the sanctions is that other exporters, perhaps Gulf states with deep ties to India, should offer to supplant Iran as an oil supplier. Indeed Saudi Arabia has offered to help in this regard. However, technical concerns at India's refineries reportedly make Iranian crude preferable.

India must have fuel. Sanctions that threaten to disrupt that supply - and have already raised oil prices - will never be welcome in India, least of all in the midst of important state elections.

And yet India also has a responsibility to help maintain a world order without dangerous nuclear-armed rogue states. India's friends should keep pressing it to cooperate with sanctions against Iran, but will also have to find ways to make that cooperation less painful.