India pressured by U.S. to stop buying Iranian oil
India purchases around 12 per cent of its oil yearly from Iran. This is worth about 12 billion dollars each year. The U.S. would like to see that amount go down to zero.
However, India is not likely to follow the U.S. advice unless it can get oil cheaper from other sources. The U.S. is apparently trying to broker deals with other outside suppliers. Sources told Bloomberg News that Saudi Arabia is willing to step up and provide oil in replacement for the Iranian oil.
Iran apparently is willing to cut the price of the oil it sells to India. This is creating a win situation for India as it can play off Iran against other suppliers.
India had actually been purchasing more oil from Iran. In January there was an increase of 40 per cent from a month earlier.
Pressure on Iran and rumours of war have the potential for a negative impact on the global economy as the price of oil rises. Goldman Sachs has predicted crude could rise to $123.50 a barrel this year. This could very well slow global economic growth. For more see this article.