In a move that has both commercial and strategic implications, India is looking to increase its oil imports from Iraq even as it continues to reduce its dependence on Iran oil.
With Iraq increasing production and the crude being the same as that of Iran, it can be an easy substitute for Iran, which is under a squeeze of sanctions from the US and European Union for its nuclear programme.
The energy ties will be top among the agenda of external affairs minister Salman Khurshid’s visit to Iraq on June 19 and 20. The visit also takes place a month ahead of India-US strategic dialogue in New Delhi at the foreign ministers’ level.
There has been a substantial dip in Iran’s contribution to the total crude import of the country.
According to latest official statistics, in the year 2012-13 (ending March), India’s import dipped by over 26.5% to 13.3 million tonnes, compared to 18.1 million tonnes the year before.
Also in 2012-13, Iranian supplies accounted for 7.2% of India’s oil imports, down from 10.5% in the previous year.
“There are issues related to payments as well as the insurance issues faced by oil refineries due to the sanction (in Iran). That’s why the import is down,” a government official said.