Iran assures New Delhi of oil supply flexibility a day after diplomat's warning

The clarification came from the Iran embassy in New Delhi  a day after Deputy Chief of Mission and Charge d’Affaire of Iran Massoud Rezvanian Rahaghi warned that India would lose its special status as importer if it swap Iran for countries like Saudi Arabia, Russia, Iraq, the US, and others to make up for cuts in imports from Iran.

Rahaghi reportedly made the comment at a seminar on Tuesday on 'Emerging Challenges and Opportunities in the Global Diplomacy and its impact on bilateral relation with India.'

But Iran clarified a day later in a statement that read: “Iran has always been a reliable energy partner for India and others, seeking a balanced oil market and rational prices of oil which ensures the interests of both countries as consumer and supplier."

"Iran understands the difficulties of India in dealing with the unstable energy market and it has done and will do its best to ensure security of oil supply to India through offering various flexibility measures which facilitates our bilateral trade in particular Indian export to Iran.

"India is a sovereign nation and taking into account many criteria including its friendly relations with supplier countries, market factors, geopolitical and geo-economical considerations and potentials and reliability of the oil suppliers chooses its energy partners,” the statement said.

Rahaghi had been quoted in media saying that "Iran did its best to ensure security of oil supply to India and offered flexibility through selling oil with longer term credits and discounted prices as well as allowing oil payments in Rupee and insurance coverage for oil shipments which facilitated bilateral trade and pushed up significantly Indian exports to Iran."

“These measures also assisted Indian government to minimize its Current Account Deficit (CAD) considerably due to rupee denominated oil imports from Iran curtailing foreign exchange outflow. However, if India were to replace Iran with countries like Saudi Arabia, Russia, Iraq, the US and others for the 10 per cent of its oil demand then it may have to revert to dollar-denominated imports which mean higher CAD and deprivation of all other privileges Iran has offered to India,” the diplomat had said.

But the embassy in their follow up statement said: “There is a strong and vast potential to expand these cordial ties derived from the same roots and sharing common culture and values. The two countries share the same understanding towards many global and regional challenges and cooperate harmoniously in many international fronts. Coercive literature has never had a place in the history of Iran and India relations and their dialogues.”

The statement said Iran always welcomed India’s investment in Chabahar Port and construction and expansion of the roads and railway connecting Chabahar Port to Iran’s and Afghan’s national railway networks.

“However, due to the importance of the issue, Iran has frequently emphasised on expediting Indian investment, and pushing Indian partner companies to accelerate their engagement in execution of the projects,” the statement added.

India last month had clarified that it is not under pressure by the United States to cut trade ties with Iran with special reference to Iranian oil import.

India's Ministry of External Affairs (MEA) had said that the country would take all necessary steps, including engagement with relevant stakeholders to "ensure our energy security. "

India has already made it clear that it does not recognize unilateral ban imposed by the US.

This comes after the US State Department official reportedly said that the US wants Iranian oil buyers to stop imports from November, aimed at reimposing sanctions on Iran.

According to reports, US Ambassador to the United Nations Nikki Haley asked Indian Prime Minister Narendra Modi to decrease his country' dependence on Iranian oil.

Sunjay Sudhir, joint secretary for international cooperation at India's petroleum ministry, told CNNMoney, "India does not recognize unilateral sanctions, but only sanctions by the United Nations."