India looking at Saudi, Iraq to diversify oil sourcing

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Washington: India is looking at Saudi Arabia and Iraq to diversify its global oil purchase while making efforts to reduce its dependence on Iranian oil, a top Obama Administration official has told US lawmakers.

Assistant Secretary of State for South and Central Asia Robert Blake told lawmakers at a Congressional hearing on South Asia that India is working to cut down the import from Iran not because of the American influence but because of commercial considerations as well. "In the Indian case, they`ve actually had a long-term policy to source more from Saudi Arabia. This has been going on for several years. So you`ll see the percentage from Saudi Arabia has been growing rapidly," Blake told lawmakers on Wednesday.

"A more recent important source for them is Iraq, which itself has been increasing its own production. And so that also has become quite an important source for India," he said responding to a question from Congressman Gerald Connolly during a Congressional hearing convened by the House Committee on Foreign Affairs Sub Committee on the Middle East and South Asia.

He said the percentage of Iranian import is steadily going down in the Indian oil market as the country makes progress in lessening reliance on sanctions-hit Iran as a source of fuel. Blake`s remarks come against the backdrop of Indian government saying it has cut crude import from Iran by 11 per cent to 15.5 million tonnes for this financial year. India depends on Iran for 12 per cent of its 80 per cent of imports of crude.

"To be clear, India is making this progress not because of our own bilateral urgings but I think they`re making progress because they say that this is because of financial and commercial considerations. Most of the Indian companies that have been working in Iran are pulling out for their own reasons – looking at market considerations. That`s certainly a welcome development from our perspective," he said.

"So we`ve had a good dialogue on this, and again, we welcome the progress. And that percentage is steadily going down, even as India`s energy needs are growing quite substantially," he said. As a result of the US sanctions on Iran, it is becoming tough for countries to do business with Iran. Many Indian companies have pulled out of Iran because of market considerations, Blake said.

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