Iran's Deputy Ambassador and Charge d'Affaires Massoud Rezvanian Rahaghi said Iran will end the privileges being provided to India if it tries to source oil from countries like Saudi Arabia, Russia, Iraq, the U.S. and others to offset cuts in Iranian oil.
President Donald Trump said in May he would pull the United States out of an worldwide accord under which Tehran had agreed to limit its nuclear development in exchange for sanctions relief.
Last week, while ruling out waivers to India and Turkey - which have told Washington that they would continue to import oil from Iran - the U.S. had indicated willingness to work with countries that are reducing their oil imports from Iran.
Iran on Wednesday said it will do its best to ensure the security of oil supply to India, asserting that it has been a reliable energy partner for New Delhi.
The drop suggests that despite its initially tough stance on US sanctions, Indian refiners have started changing their mind as the November 4 deadline to wind down business relations with Iran draws nearer. The Iran sanctions are one of the top reasons for the price rally that has come to bite India's refiners amid surging domestic demand for fuels, so chances are New Delhi will try to secure a waiver.
The Trump administration has moved in recent months to impose penalties on Iranian individuals and entities, and senior USA officials have said that Washington has begun pressing other countries to end Iranian oil imports by November.
The defense chief also said that the US has adopted the "tactic of causing distance between the people and the system" to harm the country after finding that it can not reach its objectives by imposing sanctions. "The zero tolerance policy and the pace with which it is moving no doubt concerns Iran's current crude buyers".
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Lower purchases by private refiners dragged down India's June imports from Iran although state refiners stepped up purchases. The two firms significantly cut their imports from Iran in June. Sourcing from Iran increased following the lifting of sanctions.
Following Trump's announcement, companies are not allowed to strike new deals in the Iranian oil and energy sector. The sources declined to be identified.
But, it still could continue imports if Iran accepts an alternative payment or offers a longer credit period. In return, India buys 13% of the total exported crude oil from Iran, which is a huge proposition in itself.
Iran supplied 18.4 million tonnes of crude oil during April 2017 and January 2018 (first 10 months of 2017-18 fiscal).
Imports by state refiners during the period more than doubled to about 413,400 bpd from 191,700 bpd, the data showed.
He added that the USA pressure on Iran came as the United States launched an "economic war with China and even its allies", referring to trade tensions between Washington and many of its main trading partners.
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