India banned US-sanctioned Iranian ships from entering its water

In a move that is likely to impact the crude oil supply to the country, India banned US-sanctioned Iranian ships from entering its water. The decision to this effect was taken by the government on 27 July 2012.

Earlier in July 2012, the government had allowed import of crude oil from Iran in ships arranged by Tehran. It had allowed Mangalore Refinery and Petrochemicals Limited (MRPL) and other state refiners to import oil from Iran on CIF (cost, insurance and freight) basis wherein Tehran was to arrange for ships and insurance. But the order was annulled within days and MRPL, the nation's largest importer of Iranian oil, could hardly import a ship from Tehran.

The US had imposed sanctions on the National Iranian Tanker Company and its 58 vessels on 13 July 2012, in a move aimed at forcing Iran to stop its illicit nuclear programme. Earlier European Union had also imposed a similar kind of ban on Iran's oil.

The decision to ban US-sanctioned Iranian ships will have farreaching consequences for India as Iran is the fourth largest oil supplier to the country. India has been largely dependent on Iran to meet its growing oil need. India imports nearly 12 percent of its entire oil requirement from Iran, and banning the Iranian ships could aggravate the situation in the country which has already been facing the high price of oil.