Old friends and the merry-go-round

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Iran seizes Indian ship carrying oil from Iraq

Sachin Parashar, TNNAug 15, 2013

NEW DELHI: In a development with serious international ramifications, the Iranian Revolutionary Guard Corps (IRGC) has detained an Indian ship carrying oil in the Persian Gulf. Sources said the ship, named MT Desh Shanti, was on its way to India from Iraq when it was detained by the IRGC.


The ship is owned by the Shipping Corporation of India. The development has stunned authorities here as it was transporting oil from Iraq, a country which has overtaken Iran as the second largest supplier of crude to India after Saudi Arabia.


The government-owned ship was detained in international waters in the Persian Gulf before being coerced into entering Iranian waters. Late Wednesday evening, the ship was on its way to the Bandar Abbas port, guided by the IRGC.

Sources said Iran claimed to have detained the ship because of environmental concerns. Tehran authorities conveyed to India that the ship was polluting Iranian waters, but this is being seen as flimsy reasoning.


The development has shocked the Indian establishment, which on Wednesday evening was still trying to gather information on the incident. Although India has taken steps to reduce its crude imports from Iran, Tehran had never hinted that it could resort to such drastic actions.


India has cut crude imports from Iran, a fallout of sanctions imposed by the US and the EU. The cut, in fact, helped India -- along with China and South Korea -- win a waiver from the US allowing it to continue to import crude from Iran.

In 2012, India is estimated to have imported crude from Iraq worth more than $15 billion. IOC is the largest importer of crude oil from Iraq. In October 2010, Iraq replaced Iran as the country with the third largest proven reserves of 143.1 billion barrels of oil.


For India, it is not far-fetched to draw the conclusion that Tehran is peeved with India's rising crude imports from Iraq and that the seizure of the ship may be a way of showing its displeasure. But this doesn't just have consequences for India-Iran ties but also internationally, as it will raise questions about what Tehran intends to do in the Persian Gulf where it has even threatened use of force in the past to show its influence in the oil trade.


Iranian authorities are known to have recently threatened that Tehran will block the crucialStrait of Hormuz oil trade route in the face of sanctions imposed by western countries. The Strait of Hormuz links the Gulf with the Indian Ocean, facilitating transport of oil from major oil producing countries like Saudi Arabia, Bahrain, Kuwait and Qatar. Iran's vice-president Mohammad Reza Rahimi had warned in 2011 that "not a drop of oil'' would be allowed to pass through the Strait of Hormuz if more sanctions were imposed on Iran.

from: http://articles.timesofindia.indiatimes.com/2013-08-15/india/41412731_1_hormuz-indian-ocean-irgc

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Meanwhile...

Iraq And Iran Sign A Deal To Supply Iraq With Natural Gas At International Market Prices


Baghdad confirmed a deal with Iran to import natural gas at international market prices, the AP reported Tuesday.

The four-year deal stipulates that Iraq will buy 850 million cubic feet of gas a day at international market prices, Musab al-Mudaris, a spokesman for the Iraqi Electricity Ministry, said.

Al-Mudaris said the gas will be transported through a pipeline that will be completed in two months.

The announcement comes after Iran's outgoing president, Mahmoud Ahmadinejad, had high-level meetings with Iraqi officials in Baghdad last week.

Iranian state-controlled media, Press TV, reported on Friday that Tehran and Baghdad agreed to explore and develop crude oil and natural gas fields along their common border.

Natural gas recently sold for $3.74 per million Btus.

from: http://www.ibtimes.com/iraq-iran-sign-deal-supply-iraq-natural-gas-international-market-prices-1356931