US House of Representatives has approved a sanctions waiver for India over its purchase of Russian S-400 missiles in 2018. What is the political implication of this move? What does it say about India's strategic importance? Palki Sharma tells you.

Gravitas: US House approves CAATSA sanctions waiver for India

Oil prices hit their highest since November on Tuesday after <a href="https://www.wionews.com/world/us-oil-sanctions-principally-illegal-do-not-attach-any-value-to-it-iran-212672">Washington announced all waivers on imports of sanctions-hit Iranian oil</a> would end next week, pressuring importers to stop buying from Tehran and further tightening global supply.

Despite the move, spare capacity from other suppliers such as Saudi Arabia might be able to ensure oil markets cope with a cut in Iranian exports.

<a href="https://www.wionews.com/business-economy/world-stocks-splutter-as-oil-races-to-near-six-month-high-212872">Brent crude </a>futures were at $74.67 per barrel at 0855 GMT, up 63 cents or 0.85 per cent from their last close, after hitting their highest level since November at $74.70.

US West Texas Intermediate crude futures marked their strongest since October 2018 at $66.14 per barrel, up 59 cents or 0.9 per cent from their previous settlement.

The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which allowed Iran's eight biggest buyers, most of them in Asia, to continue importing limited volumes.

Before the reimposition of sanctions last year, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries at around 3 million barrels per day (bpd), but April exports have shrunk to below 1 million bpd, according to tanker data and industry sources.

US President Donald Trump is confident that Saudi Arabia and the United Arab Emirates will fulfil their pledges to make up the difference in oil markets, a US official told reporters.

Saudi Energy Minister Khalid al-Falih said on Monday that his country would "coordinate with fellow oil producers to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance".

Saudi Arabia is the world's top oil exporter and de facto leader of OPEC, which has led global supply cuts since the start of the year aimed at propping up crude prices.

The group is set to meet in June to discuss output policy.

Barclays bank said in a note that the US decision took many market participants by surprise and would "lead to a significant tightening of oil markets".

The move to increase pressure on Iran came amid other sanctions Washington has placed on Venezuela's oil exports.

US bank Goldman Sachs said an expected decline of 900,000 bpd in Iranian exports stood "versus immediately available and demonstrated spare capacity of 2.0 million bpd, which is set to grow further later this year".

Oil prices hit their highest since November on Tuesday after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran and further tightening global supply.

Oil prices hit their highest since November on Tuesday after Washington announced all waivers on imports of sanctions-hit Iranian oil would end next week, pressuring importers to stop buying from Tehran and further tightening global supply. Despite the move, spare capacity from other suppliers such as Saudi Arabia might be able to ensure oil markets cope with a cut in Iranian exports. Brent crude futures were at $74.67 per barrel at 0855 GMT, up 63 cents or 0.85 per cent from their last close, after hitting their highest level since November at $74.70. US West Texas Intermediate crude futures marked their strongest since October 2018 at $66.14 per barrel, up 59 cents or 0.9 per cent from their previous settlement. The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, ending six months of waivers which allowed Iran's eight biggest buyers, most of them in Asia, to continue importing limited volumes. Before the reimposition of sanctions last year, Iran was the fourth-largest producer among the Organization of the Petroleum Exporting Countries at around 3 million barrels per day (bpd), but April exports have shrunk to below 1 million bpd, according to tanker data and industry sources. US President Donald Trump is confident that Saudi Arabia and the United Arab Emirates will fulfil their pledges to make up the difference in oil markets, a US official told reporters. Saudi Energy Minister Khalid al-Falih said on Monday that his country would "coordinate with fellow oil producers to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance". Saudi Arabia is the world's top oil exporter and de facto leader of OPEC, which has led global supply cuts since the start of the year aimed at propping up crude prices. The group is set to meet in June to discuss output policy. Barclays bank said in a note that the US decision took many market participants by surprise and would "lead to a significant tightening of oil markets". The move to increase pressure on Iran came amid other sanctions Washington has placed on Venezuela's oil exports. US bank Goldman Sachs said an expected decline of 900,000 bpd in Iranian exports stood "versus immediately available and demonstrated spare capacity of 2.0 million bpd, which is set to grow further later this year".

Oil prices hit highest since November as US to tighten Iran sanctions

<a href="https://www.wionews.com/india-news/india-is-engaging-with-united-states-for-second-iran-oil-waiver-mea-207973">Indian refiners </a>are holding back from ordering Iranian oil for loading in May pending clarity on whether Washington will extend a waiver from US sanctions against the OPEC-member, four sources said.

In November, US President Donald Trump withdrew from the 2015 Iran nuclear deal and re-imposed broad economic sanctions.

Washington, however, gave a six-month <a href="https://www.wionews.com/world/us-to-give-iran-oil-sanctions-waiver-to-eight-countries-including-india-south-korea-japan-report-175107">waiver to eight nations </a>including India, allowing them to import some Iranian oil until early May. India, Iran's top oil client after China, was allowed to buy about 9 million barrels a month.

India hopes to get clarity in seven to 10 days on any extension of the waiver, as well as the amount of oil that could be purchased if an extension is given, the sources said.

"We don't know about US thinking, whether they will allow India to buy oil or not," said one of the sources, all of whom declined to be named due to the sensitivity of the issue.

Under the current waiver, India can buy about 300,000 bpd of Iranian oil - about half the amount before the sanctions were imposed - and New Delhi wants to keep buying Iranian oil at that level, Indian sources said last month.

Since November only state-run Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum and Mangalore Refinery and Petrochemicals have been buying Iranian oil.

State-refiners and India's oil ministry did not respond to Reuters request for comments.

Brian Hook, the special US envoy for Iran, in March said Washington is pursuing its plan to bring Iranian crude exports to zero. Last week Hook said three of eight importers granted waivers by Washington have cut shipments to zero.

"Sanctions against IRGC (Islamic Revolutionary Guard Corps) have also added to the uncertainty over supply of Iranian oil ... in the current scenario when enough alternatives are available it is better to wait for a clarity," said another of the sources.

Trump on Monday designated Iran's Guards a foreign terrorist organization. Iran's president Rouhani said Tehran will resist US pressure and hailed IRGC as defenders of Iranians.

Indian refiners are holding back from ordering Iranian oil for loading in May pending clarity on whether Washington will extend a waiver from US sanctions against the OPEC-member, four sources said.

Indian refiners are holding back from ordering Iranian oil for loading in May pending clarity on whether Washington will extend a waiver from US sanctions against the OPEC-member, four sources said. In November, US President Donald Trump withdrew from the 2015 Iran nuclear deal and re-imposed broad economic sanctions. Washington, however, gave a six-month waiver to eight nations including India, allowing them to import some Iranian oil until early May. India, Iran's top oil client after China, was allowed to buy about 9 million barrels a month. India hopes to get clarity in seven to 10 days on any extension of the waiver, as well as the amount of oil that could be purchased if an extension is given, the sources said. "We don't know about US thinking, whether they will allow India to buy oil or not," said one of the sources, all of whom declined to be named due to the sensitivity of the issue. Under the current waiver, India can buy about 300,000 bpd of Iranian oil - about half the amount before the sanctions were imposed - and New Delhi wants to keep buying Iranian oil at that level, Indian sources said last month. Since November only state-run Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum and Mangalore Refinery and Petrochemicals have been buying Iranian oil. State-refiners and India's oil ministry did not respond to Reuters request for comments. Brian Hook, the special US envoy for Iran, in March said Washington is pursuing its plan to bring Iranian crude exports to zero. Last week Hook said three of eight importers granted waivers by Washington have cut shipments to zero. "Sanctions against IRGC (Islamic Revolutionary Guard Corps) have also added to the uncertainty over supply of Iranian oil ... in the current scenario when enough alternatives are available it is better to wait for a clarity," said another of the sources. Trump on Monday designated Iran's Guards a foreign terrorist organization. Iran's president Rouhani said Tehran will resist US pressure and hailed IRGC as defenders of Iranians.

India delays May order for Iran oil, awaits clarity on sanctions waiver: Report

After India formally signs the mega USD 5.4 billion S-400 missile defence deal with Russia, which places it in the bracket of a potential American sanction, the Trump administration said the presidential waiver granted by the Congress in this regard is narrow and intended to wean countries off of Russian equipment.

"The (CAATSA presidential) waiver is narrow, intended to wean countries off of Russian equipment and allow for things such as spare parts for previously-purchased equipment," a White House National Security Council Spokesperson told Friday, a day after India entered into an agreement to purchase state of the art S-400 missile defence system.&nbsp;

The S-400 missile defence system would give India's defence a cutting-edge security against any missile attack by its enemies.

"India lives in a very turbulent and nuclear-powered region. S400 provides that assurance and is compatible with its current platform. Friends understand that these discussions with Russia started several years ago hence I do not believe US will impose the sanction on India," Mukesh Aghi, president of US India Strategic and Partnership Forum told.

But for the presidential waiver, Countering America's Adversaries Through Sanctions Act or CAATSA sanctions kicks in in the event of a major purchase like S-400 missile defence system. Ahead of the deal, the US had urged India not to purchase S-400. It reiterated Friday.

"The Administration has indicated that a focus area for the implementation of CAATSA Section 231 is new or qualitative upgrades in capability including the S-400 air and missile defence system," the White House NSC Spokesperson said.&nbsp;

Last month, US had imposed sanctions on China for the purchase of S-400 from Russia. "Our recent action to sanction a Chinese government entity for an S-400 delivery underscores the seriousness of our resolve on this issue," the spokesperson said.&nbsp;

"The waiver authority is not country-specific. There are strict criteria for considering a waiver," said the spokesperson.&nbsp;

The State Department, which is tasked with reviewing the deal and initiated the process of sanctions or waiver under CAATSAA, and then recommend to the president, did not respond to the question on the time frame and the process.&nbsp;

However, one industry source told that the law is ambiguous about "when a waiver is necessary so this can be avoided for years."&nbsp;

The National Defence Authorization ACT (NDDA) 2019 gives the president the power to waive off the CAATSA sanctions if it is national security interest. It also lists out several other options for presidential waiver, prominent among which is the purchase country India, in this case, is taking or will take steps to reduce its inventory of major defence equipment and advanced conventional weapons produced by the defence sector of the Russian Federation as a share of its total inventory of major defence equipment and advanced conventional weapons over a specified period.&nbsp;

In fact, over the last more than a decade, India the top arms purchaser of the world, has gradually reduced its dependence on Russian arms. It now stands at about 60 per cent, which is much lower than it was a decade ago. The United States has been a major beneficiary of this.&nbsp;

As part of its diversification plan, India has increased its purchase of arms from the US from about zero to more than USD 18 billion. India is in the process of purchasing arms and equipment worth billions of dollars from the United States in the coming months and years including armed and unarmed drones and fighter jets.

A presidential waiver can also be given if a country like India, in this case, is cooperating with the United States government on other security matters that are critical to United States strategic interests. Experts believe that is exactly the case and one of the main reasons for US designating India as a major defence partner.

After India formally signs the mega USD 5.4 billion S-400 missile defence deal with Russia, which places it in the bracket of a potential American sanction, the Trump administration said the presidential waiver granted by the Congress in this regard is narrow and intended to wean countries off of Russian equipment.

After India formally signs the mega USD 5.4 billion S-400 missile defence deal with Russia, which places it in the bracket of a potential American sanction, the Trump administration said the presidential waiver granted by the Congress in this regard is narrow and intended to wean countries off of Russian equipment. "The (CAATSA presidential) waiver is narrow, intended to wean countries off of Russian equipment and allow for things such as spare parts for previously-purchased equipment," a White House National Security Council Spokesperson told Friday, a day after India entered into an agreement to purchase state of the art S-400 missile defence system. The S-400 missile defence system would give India's defence a cutting-edge security against any missile attack by its enemies. "India lives in a very turbulent and nuclear-powered region. S400 provides that assurance and is compatible with its current platform. Friends understand that these discussions with Russia started several years ago hence I do not believe US will impose the sanction on India," Mukesh Aghi, president of US India Strategic and Partnership Forum told. But for the presidential waiver, Countering America's Adversaries Through Sanctions Act or CAATSA sanctions kicks in in the event of a major purchase like S-400 missile defence system. Ahead of the deal, the US had urged India not to purchase S-400. It reiterated Friday. "The Administration has indicated that a focus area for the implementation of CAATSA Section 231 is new or qualitative upgrades in capability including the S-400 air and missile defence system," the White House NSC Spokesperson said. Last month, US had imposed sanctions on China for the purchase of S-400 from Russia. "Our recent action to sanction a Chinese government entity for an S-400 delivery underscores the seriousness of our resolve on this issue," the spokesperson said. "The waiver authority is not country-specific. There are strict criteria for considering a waiver," said the spokesperson. The State Department, which is tasked with reviewing the deal and initiated the process of sanctions or waiver under CAATSAA, and then recommend to the president, did not respond to the question on the time frame and the process. However, one industry source told that the law is ambiguous about "when a waiver is necessary so this can be avoided for years." The National Defence Authorization ACT (NDDA) 2019 gives the president the power to waive off the CAATSA sanctions if it is national security interest. It also lists out several other options for presidential waiver, prominent among which is the purchase country India, in this case, is taking or will take steps to reduce its inventory of major defence equipment and advanced conventional weapons produced by the defence sector of the Russian Federation as a share of its total inventory of major defence equipment and advanced conventional weapons over a specified period. In fact, over the last more than a decade, India the top arms purchaser of the world, has gradually reduced its dependence on Russian arms. It now stands at about 60 per cent, which is much lower than it was a decade ago. The United States has been a major beneficiary of this. As part of its diversification plan, India has increased its purchase of arms from the US from about zero to more than USD 18 billion. India is in the process of purchasing arms and equipment worth billions of dollars from the United States in the coming months and years including armed and unarmed drones and fighter jets. A presidential waiver can also be given if a country like India, in this case, is cooperating with the United States government on other security matters that are critical to United States strategic interests. Experts believe that is exactly the case and one of the main reasons for US designating India as a major defence partner.

CAATSA sanctions waiver intended to wean countries off of Russian equipment: US

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