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.

Iranian leader upbeat on pipeline.

While the U.S. and others try to isolate Iran, Iran itself is forging better relations with its neighbours as is shown by the article on a pipeline to India. Iran is also helpin Sri Lanka with a refinery.
Asian countries are interested in assuring supplies of oil and natural gas. This is article is from the BBC.


Iranian leader upbeat on pipeline

The pipeline is crucial for India's energy supplies
Iranian President Mahmoud Ahmadinejad has given assurances to India over the construction of a multi-billion dollar gas pipeline during talks in Delhi.
He told the Indian Prime Minister, Manmohan Singh, that all obstacles holding up the long-delayed project would be resolved within 45 days.
A deal has been stalled by disputes over transit fees and security issues.
The pipeline will transport gas from Iran to India through Pakistan, and is seen as crucial to Indian energy needs.
Analysts say the pipeline could contribute to regional security as Iran, Pakistan and India would depend on each other more and benefit from mutual co-operation.
Hold-ups
After talks with Mr Singh at the end of his tour of South Asia, Mr Ahmadinejad said he was optimistic about a deal on the 2,600-km (1,620-mile) pipeline, which would initially transport 60m cubic metres of gas (2.2bn cubic feet) a day.
"The two sides are very close to each other. We will finalise the gas pipeline soon," he told reporters in Delhi.
This pipeline is not just a commercial deal - it is a part of confidence-building measures
Shivshankar MenonIndian foreign secretary
Mr Ahmadinejad said a firm proposal on the pipeline would be formulated in the next 45 days and then put before the leaders of the three countries involved.
The Indian government said the project was feasible, but needed to be financially viable with assured supplies.
India has boycotted trilateral meetings since mid-2007, saying it wanted to first resolve the issues of transit fees and transportation tariffs with Pakistan, its long-standing regional rival.
"This pipeline is not just a commercial deal. It is a part of confidence-building measures," Indian Foreign Secretary Shivshankar Menon said on Tuesday.
The BBC's Sanjoy Majumder in Delhi says the visit has also raised the interest of the US, with Washington suggesting that India put pressure on Iran over its controversial uranium enrichment programme - a suggestion soundly rejected by Delhi.
Although India has twice voted against Iran at the International Atomic Energy Agency (IAEA), it says that it supports Tehran's right to fulfil a peaceful nuclear programme within the constraints of international law.
India also said relations between it and Iran spanned centuries, and that they were capable of handling them with due care.