India’s Iranian oil problem gets a US twist

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India’s Iranian oil problem gets a US twist
Indian Foreign Minister Sushma Swaraj (R) meets Iran’s Foreign Minister Mohammad Javad Zarif on May 14, 2019. Photo AFP/Prakash Singh

The Iranian foreign minister visited New Delhi even as India is all set to elect a new government

By Vivek Katju 16 May 2019

It is extraordinary for a foreign leader to visit a country in the midst of a severely contested parliamentary election. Yet, Iranian Foreign Minister Javad Zarif was in Delhi on May 14 to meet his Indian counterpart Sushma Swaraj. 

What compelled Zarif to come calling – at his own initiative, as Indian official sources pointed out? Is his visit an indication that Iran is certain of Prime Minister Narendra Modi’s success in the six-week-long election?

Iran closely follows political developments in South Asia, especially in India and Pakistan. This is because of both historical contacts between Iran and these two countries but also on account of India’s traditional and, until recently, growing purchases of Iranian oil.

India also has a substantial number of Shia Muslims, and the Iranian government maintains close links with them largely for matters of faith. India and Iran also have a common interest in peace and stability in Afghanistan as well as in developing connectivity through Iran’s Chabahar port. Significantly, the US has excluded that project from sanctions.

There is little doubt that Zarif, who is globally acknowledged as an accomplished professional diplomat, would not have expended diplomatic capital in briefing a government on sensitive issues concerning the regional situation five days before the last round of polling and nine days before the final count, unless the Iranian regime were convinced of that government’s return to power.

Thus, the fact of the visit itself suggests how an important regional player is looking at the post-election Indian scene. But there was obviously more to the visit than massaging the vanity of the Modi government.

On May 5 the White House announced, through a statement of National Security Advisor John Bolton, that the aircraft carrier Abraham Lincoln and a bomber task force was being deployed in the Central Command region.

The decision’s purpose was to enable the US to quickly and effectively respond with “unrelenting force” to an Iranian attack on the interests of the US or its allies. Obviously, the statement’s caveat – that the US was not seeking war – did not dilute its aggressive tone.

This is especially so because Bolton’s deep-seated desire to accomplish regime change in Iran is well known.

This US decision comes in the wake of the Trump administration’s declaration of the Islamic Revolutionary Guard Corps as a terrorist organization five weeks ago. The IRGC was created after the Khomeini revolution in 1979.

It is committed to preserve the revolution both within Iran and outside, too. It is an important part of Iran’s power structure and is under the supreme leader.

The move enraged Iran and, in response, it swiftly applied the terrorist label to US forces in West Asia. This raised the specter of attacks on US armed personnel in the region.

Therefore, the aircraft carrier deployment is a logical follow-up of the IRGC designation to warn Iran of severe consequences in the case of an attack on US personnel. The inclusion of attacks on allies is an add-on. The question remains, though, if the US will attack Iran with the same vigor if Saudi or Israeli interests are targeted instead of its own.

This may be known soon. On May 13 two Saudi oil tankers, a Norwegian vessel and one from the United Arab Emirates were subjected to acts of sabotage in the vicinity of UAE’s Fujairah port. The US is now blaming Iran for the actions, which blew holes in the sides of these ships.

The Saudis have also disclosed that their oil pipeline structure in the east has been damaged through drone attacks. No party has been accused as yet but it will not be surprising if the US traces it back to Iran.

The US has also ordered all non-essential staff to leave Iraq, for the IRGC is believed to have assets there that can target US personnel and interests. All this is taking US-Iran tensions to higher levels. European states do not want conflict to break out for it would cause global turmoil.

Clearly, the Trump administration wants to cripple Iran’s economy by ensuring that it cannot export any hydrocarbon product. It withdrew the waiver it gave to eight countries, including India, which enabled them to continue to buy Iranian oil.

On its own, India had reduced its oil imports from Iran. During Zarif’s visit Sushma Swaraj conveyed to him that the government that came to office after the elections would take a decision on this issue.

India had earlier indicated that it has made alternative arrangements to prevent an interruption in oil supplies. What was left unstated was the extra cost of replacing Iranian oil. Until May 2 this year, India was importing nearly 11% of its oil imports from Iran. India also gets some crude from Venezuela, and disruption on supplies will also impact its energy basket in terms of supply and costs.

However, the Indian government believes that since the Venezuelan crude is imported by private players, the crisis can be managed and any disruptions absorbed. Since the mid-1980s, India has become a net exporter of petroleum products while also sourcing some from the US for the first time. These measures have helped mitigate some of the losses after Iranian oil exports were banned under US pressure.

Reports also indicate that Swaraj and Zarif exchanged notes on the latest position regarding the Iran nuclear deal, the Joint Comprehensive Plan of Action. Iran has still not walked away from the deal but has decided to dilute it by announcing that it will resume enriching uranium to a higher level.

This too will become a contentious point between the US and its allies Israel and Saudi Arabia and the UAE, for they want a new agreement that will prevent Iran from moving ahead at all with enrichment or maintaining or developing delivery systems.

India has vast economic, commercial and strategic interests in the West Asian region. It has a very large diaspora in the Arab Peninsular states. Hence, the maintenance of peace and security in the area is in its vital interests. Notwithstanding its preoccupation with the elections, India’s permanent establishment would be keeping a close eye on the evolving situation.

India has wisely kept away from the disputes of the region, building on its traditionally positive relations with all states. US sanctions against Iran challenge India’s strategic autonomy but then that is the case for all countries that want to frame independent foreign policies.

In any event, international diplomacy requires navigation between competing interests. In this case, Indian diplomats did discuss a possible extension of the waiver with their US counterparts.

However, in this case, US support for Indian efforts for the UN designation of Jaish-e-Mohammed founder, Maulana Msood Azhar as an “international terrorist” was considered exceedingly important. The US, in response, pointed to its interest in stoppage of Iranian oil exports.

A West Asian crisis may well become the first priority and test of the new Indian government that takes charge after the elections.

Vivek Katju is a former diplomat with the Indian Foreign Service and retired as a secretary to the government of India. He has extensive experience dealing with Pakistan and Southeast Asia.