U.S. Treasury Secretary Steve Mnuchin has indicated the government may provide temporary waivers to sanctions against Iran for countries that are struggling to reduce their exposure to their oil, Reuters reports. That’s likely to be pointed directly at India – as outlined in our 2H 2018 Outlook other countries including China are unlikely to be swayed by the American sanctions.

Iran was India’s fourth largest supplier of oil in the three months to May 31, Panjiva data shows, representing 13.2% of the total after a 15.4% rise on a year earlier. That compared to a 12.1% rise for imports more broadly.

Chart segments Indian imports of crude oil by country of origin.   Source: Panjiva

Depriving Iran of Indian oil sales would also potentially help the Trump administration’s energy policies if India instead turns to U.S. oil as a supply. In the past 12 months the U.S. accounted for just 1.0% of Indian purchases, led by Indian Oil and Bharat Petroleum. Indian Oil purchased 7.6x as much oil from Iran and Bharat 1.2x as much.

Chart segments Indian imports of crude oil by consignee and country of origin in the three months to May 31, denominated in dollars.   Source: Panjiva