The United State has threatened to impose sanctions against India if the South Asian country fails to reduce its purchase of crude oil from the Islamic Republic.
If India fails to cut Iranian imports sufficiently, Obama may be compelled to bar access to the U.S. banking system for any Indian bank processing oil payments through Irans central bank, Bloomberg quoted a US official as saying, on condition of anonymity, on Thursday.
On New Years Eve, the United States imposed new sanctions against Iran aimed at preventing other countries from importing Iranian oil and conducting transactions with its central bank.
Given the level of trade, and in particular oil, between Iran and India, targeting an Indian entity that facilitates Irans access to the international financial market should be top of mind for the US Treasury, said Avi Jorisch, a former US Treasury Department official.
This comes as India has repeatedly insisted that it will continue to purchase crude oil from the Islamic Republic.
Indian Oil Minister Jaipal Reddy said on February 27, that New Delhi has cordial relations with Iran and continues to import oil from them.
In January, Iranian crude exports to India rose to 550,000 barrels a day, up 37.5 percent from December 2011.
India, the world's fourth-largest petroleum consumer, is Iran's second largest oil customer after China and purchases around USD 12 billion worth of Iranian crude every year, about 12 percent of its consumption.
Observers believe that India will press on with its plan to increase trade ties with the Islamic Republic despite fresh Western sanctions.
TNP/HGH
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