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Tough for India, China to curtail oil imports from Iran: US

December 11, 2013 15:27 IST

India, China and other countries that have been cutting their oil imports from Iran have reached a point where it is "very very difficult" to reduce any further without seriously impacting their economies, US Secretary of State John Kerry has told lawmakers.

"What we did is we put in place a pause for the few nations -- China, India, South Korea, Japan -- there are a number of nations who are working with us very closely in sanctions enforcement who have been reducing their consumption of oil now over this period of time," Kerry told the House Foreign Affairs Committee on Tuesday.

"They have reached a point where it is very, very difficult for them to further reduce without serious impact on global economy and their economy," he said at the Congressional hearing on Iran.

Due to sanctions on Iran, India had cut imports from the Persian Gulf nation from 21 million tonnes to about 18 million tonnes in 2011-12 and to 13.1 million tonnes in 2012-13. This year imports are planned at 11 million tonnes.

Kerry also urged the Congress against imposing any new sanctions on Iran in the wake of six nations (five permanent members of the UN Security Council and Germany) reaching a deal with Iran on its contentious nuclear programme.

"Our partners don't expect us to pass new sanctions while we're negotiating, and because our partners, if we pass them now, you know, could get squirrelly on the whole idea of the sanctions."

"I mean, they'll figure we're kind of doing our own thing and that we're not part of the team," he said. He cautioned that any such move would not only have international implications but would jeopardise the deal itself.

Refuting hints of altering the sanctions regime, he said: "now, that's not a change in the sanctions regime. It's simply a pause in its application, but it still applies and it will apply after the six months are over if we don't have an agreement."

Ed Royce, Chairman of the House Foreign Affairs Committee, said that the sanctions that drove Iran to the negotiating table took years to build.

"While the interim agreement relief is limited, governments throughout the world will not be easily convinced to reverse course and ratchet up sanctions pressure if Iran is only buying time with this agreement," he said.

Companies have stayed away from Iran as much due to the atmosphere of international isolation as to the letter of US sanctions law, he said. "I am concerned that that may now be lost. Because foreign-based oil companies have jumped to start discussions with Iran. This is the headline from The Wall Street Journal, 'Iran Deal Opens Door for Businesses'."

"We've got to counter that impression," Royce argued. Kerry said that while negotiating, the US ensured that all these concerns are addressed.

"There's an important fact: Iran's nuclear program will not move forward. Under this agreement, Iran will have to neutralise, end its entire stockpile of 20 per cent enriched uranium, which you all know is a short step away from weapons-grade uranium," he said.

"Under this agreement, Iran will also halt the enrichment above 5 per cent, and it will not be permitted to grow its stockpile of 3.5 per cent enriched uranium."

Under the provisions of the deal, Iran is also prohibited from increasing the number of centrifuges in operation and installing or using any next-generation centrifuges for uranium enrichment.

He assured the lawmakers that the deal allows greater transparency and into Iran's nuclear activities and its facilities (in Fordow, Natanz and Arak), currently difficult to obtain.

"Under this agreement, we will have increased transparency of Iran's nuclear program, giving us a window into their activities that we don't have today."

"We will have access to Fordow, a secret facility in a mountain top that we've never been in. We will now get into it not once or twice, every single day," he said. 

Lalit K Jha in Washington
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