The U.S. Treasury said in a report to Congress today that Western financial sanctions on Iran have contributed to a sharp drop in the country’s access to global sources of capital last year. Foreign banks cut their exposure to Iran by $9.1 billion in 2012, down 53 percent the previous year. (Reuters, 7 February)
Meanwhile, India said today that global sanctions have prompted the country to cut its purchase of Iranian crude oil by another 20 percent this year, or 60,000 barrels a day. India currently imports 300,000 b/d. The country will receive exemption from U.S. penalties if those cuts go through.
“India has no choice but to show (the U.S.) it is cutting down crude imports from Iran if it wants to keep the exemption from sanctions,” Praveen Kumar, an analyst at FACTS Global Energy in Singapore, said. (Bloomberg News, 7 February)
New U.S. sanctions that started on Wednesday requires buyers of Iranian oil to pay in local currency to escrow accounts to be used by Iran to purchase local goods and services. It is not clear yet if India will be in full compliance of the new sanctions.