Iran and India drop the dollar in oil trading to counter "intimidation" of US sanctions • Good Assurance

Written by Darius Shahtahmasebi, op-ed via,

In order to get around the sanctions imposed by the United States, India and Iran have reportedly abandoned the US dollar and are trading oil in rupees. The reason becomes clear after examining the dynamics at play in the region.

In mid-February of last year, Iranian President Hassan Rouhani visited India and the two countries signed nine agreements marking the strengthening of ties. Indian Prime Minister Narendra Modi appeared to celebrate the growing relationship, declarer that it was "A question of great pleasure" for India that an Iranian president came to India "After 10 years of separation."

Fast forward a few months later, then ambassador to the UN Nikki Haley was downright story India that they should rethink their relationship with Tehran.

Donald Trump's decision to develop the joint Global Action Plan last year, also known as the Iranian nuclear deal, was particularly important. stroke to Iran-India relations. At the time of formulation of the JCPOA, Indian officials felt that the agreement was the "Best offer available." After the implementation of the JCPOA in 2016, Iranian oil exports to India increases more than 110 percent.

Maybe the problem is not always that Washington does not want to contain rivals in the Middle East and Asia, but perhaps it also wants to keep control of its so-called allies. India is currently the third largest oil consumer in the world and expected To become the most important by 2040. As its domestic reserves do not meet the needs of its rapidly expanding economy, India imports 80% of its oil supply from overseas, including and especially from Iran.

Iran's anti-Iran sanctions regime was Iran's third largest supplier of crude oil (it is now sixth in law). It is therefore not surprising that the spokesman of the Indian Ministry of Foreign Affairs responded saying that Haley had "His views, and our views on Iran are very clear."He also warned that India "Take all necessary measures, including engaging the relevant stakeholders to ensure our energy security."

It seems that the time of foreign states that have been forced to adopt a dangerous foreign policy is over. If Washington has the slightest doubt about it, just look to this exclusive Reuters agency. report revealing that India had started paying Iran for its oil in rupees, according to a senior bank official, under the pretext of six months waiver which has been given to seven other countries (including China). According to the report, In a previous round of sanctions imposed by the United States, India had settled about half of the oil payments in rupees and the rest in euros. However, this time, all payments must be made in rupees.

In addition, the agreement, worth $ 1.5 billion, would give Iran $ 637 million in tax relief. For its part, Iran will use its rupee reserve to finance its imports of pharmaceuticals and other items from India, invest in Indian companies and fund missions and Iranian students in India.

Prior to this arrangement, sanctions imposed by the United States continued to decimate Iran's ability to trade freely with its partner. Oil price Explain That in December, Indian oil imports from Iran dropped by 41%, reaching just over 300,000 barrels per day (bpd). This is indeed the amount allowed under the waiver granted by Washington.

Insurance companies are increasingly refusing to engage in transactions involving Iran because of the risks of sanctions. However, according to a separate Reuters report reportRussian and Chinese shipping companies have mobilized to facilitate trade between India and Iran.

It seems to me that if enough countries continue to unite to cancel Washington's sanctions, they will at some point become totally ineffective. It also seems that Washington is pushing these countries to work more closely together, while these countries might have been more free to explore their differences and disagreements had they been left to their own devices.

The truth is that India and Iran have too much in common India to fully comply with Washington's strategy global bullying. There are also many things that Iran can give to India that the United States can not, and not only free shipping, insurance and extended credit. As a diplomat Explain, India and Iran both share an interest in countering Sunni-backed extremism, particularly in Pakistan and Afghanistan. They both have an interest in doing what they can to maneuver China in some ways.

In February, the two countries signed a lease agreement between the Iran Ports and Harbors Organization and India Ports Global Limited, which allows India to manage part of Chabahar port for 18 months. .

Both countries issued a joint statement at the time, describing the port as a "Golden walkway" this will help the two countries to get closer to Afghanistan and Central Asia. It seems that this gateway is so golden that India has already committed more than 500 million dollars in the project, which suggests that it could become a multi-billion dollar project.

The idea of ​​the project is to improve "Energy, security and regional connectivity" to reach Afghanistan. In reality, he allowsIndia will ship supplies to Afghanistan while bypassing Pakistan. The port of Chabahar, in southeastern Iran, is about 90 km west of Pakistan's Gwadar port, the epicenter of a massive Chinese infrastructure program in Pakistan. It is the even where it was said that China was establishing a military base.

In other words, if India is forced to join US efforts to completely isolate Iran on the world stage, it risks losing a significant share of the region's fruits to Pakistan and China. This is not a conjecture; Iran has already achieved in Pakistan and China to participate in the Chabahar project. As an omniscient Atlantic Council resumeif India bows in front of the United States, it risks losing Iran to China's profit.

India also needs the Iranian ports to complete the so-called North-South International Transport Corridor (INSTC), which would ideally connect India to the Persian Gulf, Central Asia, the United States, and the rest of the world. Russia and even to Europe, and would increase India 's trade, a billion dollars, with Central Asia. at $ 170 billion.

China already has a direct connection with Central Asia, which puts India at a disadvantage, and its trade with Central Asian countries is already $ 30 billion; well above India. In 2000, India, Iran and Russia signed an agreement to develop the North-South transport corridor.

India, Iran and Afghanistan outfit a tripartite meeting last September during which they discussed the peace process in Afghanistan, cooperation against terrorism and the port of Chabahar. It should be noted that Pakistan and China did not participate in this discussion. Just last week Iran and India held a similar meeting.

India is also currently development two gas fields, Farzad-B in Tehran and the South Pars deposit located between Iran and Qatar (which is the the biggest gas field in the world). Trump may soon realize how difficult it is to isolate these states from each other after simply reviewing a world atlas.

Even the effect of US sanctions on ordinary citizens whom the United States considers to be allies does not seem to have been taken into account. More reports allege that the absence of Iranian oil drives up oil prices, thus affecting ordinary Indian residents who benefited from lower oil prices under the JCPOA. Does the United States want the Indian people to hate Iran or hate those who apply these sanctions?

Would have, a "Preferential trade"agreement between Iran and India is also under way and will come into force in the not-too-distant future. Both nations also already signed a cooperation agreement worth $ 2 billion in the railway sector. At the beginning of this year, Iran also ad he would invest Rs 1,500 crore to expand a refinery run by Chennai Petroleum Corp. Iran would try to thwart the sanctions imposed by the United States and strengthen its position in India.

You will not see it in the mainstream media, but India discreetly allowed an Iranian bank to open a branch in Mumbai last week.

Despite undue pressure from Washington, India has still not found its place indicated he will comply with his sanctions and the waiver granted to him (to the extent that possible).

We do not know what the United States hopes to achieve with this strategy. Admittedly, the sanctions are considerably weakening the Iranian economy and threatening the collapse of its currency, but they also push these contradictory states to consider agreements that bypass the use of the US dollar, even with Washington's more traditional allies. If enough countries abandon the use of the dollar in bilateral trade, the dollar will no longer be used by the world before. Currently, Venezuela, Qatar, China, Russia, India and Iran – just to name a few – are all countries that have considered using alternative currencies for counter the Washington sanctions regime.

If the ultimate goal of the United States is to weaken the status of the dollar in world markets, it can be my guest.