Published on: Oct 8, 2018 @ 10:18 – The US has threatened India with sanctions over its agreement to purchase the S-400 system from Russia, and additionally India would be out of line with US policy vis-a-viz Iran based upon its significant increase of Iranian crude purchases over US supplies. The US, realizing they are losing the script on a certain level, and knowing that they cannot ‘sanctions’ their way into total global isolation, may consider a waiver of sorts for India, insofar as purchasing the S-400 ought to otherwise immediately pre-qualify the subcontinent for sanctions.
India’s purchases of US crude oil have fallen by 75% over the past four months as the subcontinent stocks up on Iranian crude.
On October 5th, Putin and Modi met to seal the deal on the purchase of the S-400 system.
Taken together, these move in tandem with a general trend we have accurately forecasted that India’s advances as a multipolar world player would see it openly embrace the decline of Atlanticism, without attempting to needlessly sour ties with any Atlanticist country like the US.
It is furthermore not random that these two news events happen concurrently. In short, India is showing that it will have the Russian S-400 no matter what, possible sanctions by the US may be a danger to India, but it shows that it can weather this by affirmatively, thereby improving its bargaining position against the US by purchasing Iranian oil instead. It absolutely intends to take this to the table with the US – one has to show they can do without in order to deal.
Critics of India’s foreign policy around its push to have normalized trade relations with Atlanticist powers such as the US or Western Europe do not stand to internal logical consistency, nor do they bear an understanding of international relations as they exist in reality. Russia also wants normalized relations, wants and end to the sanctions regime, and Iran as well was pushing for an end for sanctions and supports and remains committed to the JCPOA. So this is not unique to India – India has only managed, not due to cunning or peculiar genius but rather to its material situation, not to be the focus of isolation, and has played an important role for the US to ‘carefully land’ its crashing empire in a safe field somewhere, which does not jeopardize peace and stability overall. The US is not going away as a major player, it is simply disappearing as the empire.
It is the US which is trying to show its speculator class that it is doing everything to hold onto its former position as the sole global hegemon, it is not the rest of the world that wants the US to have no relations at all with the rest of the world within the context of the emerging multipolar world reality.
The hard facts are difficult not to notice: US oil shipments to India fell to 84,000 barrels per day (bpd) last month, from a record high of 347,000 bpd in June, the Reuters news agency reported on Friday the 5th, citing information from the traders and shipping intelligence firm, Kpler.
Indian buyers replaced US shipments with purchases of Iranian crude to 502,000 bpd in the same month, up 111,000 bpd over August, which is astonishing, and that came despite false western reports from Reuters previously that India was cutting Iran oil imports.
India is actually the second biggest purchaser of Iranian crude after China overall, which also increased shipments from the Middle Eastern country by 29,000 bpd to 620,000 bpd. According to Kpler, China also cut its US purchases amid an ongoing trade spat with the United States, and has found a replacement market in India. All of this points to very interesting developments, given the importance of energy markets in both determining and reflecting existing dynamics.
That India is increasingly bucking US diktats is evidenced in that the rise comes despite a November 4th deadline established by US President Donald Trump for companies to “wind down” their trade with Iran, as the country is to face sanctions on its energy sector.
The Kpler report separately said that India will furthermore buy a whopping 9 million barrels of Iranian oil in November, telling all that the world’s third biggest oil importer would continue to buy crude from Iran despite the US sanctions. The 9 million barrels apparently breaks down this way: Indian Oil Corp will buy 6 million barrels, and Mangalore Refinery and Petrochemicals Ltd together will have 3 million barrels, it cited a source with intimate knowledge of the matter.
At the same time, as said, the US is not eager to find itself the one sequestered from the international community, as it continues to fail in its attempts to sanction or isolate one major country after another. China, Turkey, Iran, Russia, India – these are not minor countries, but all regional hegemons, and several such as Russia and China already have extra-regional force projection both historically and presently.
The Indian government “has conveyed to the Trump administration that India is a fit case for a presidential waiver from the provisions of Countering America’s Adversaries Through Sanctions Act (CATSA) on Russia and the sanctions on trade with Iran,” the Hindustan Times reported on Friday.
Last week, the Iranian foreign minister said India is committed to buying Iranian oil and continuing the two nations’ economic cooperation after a meeting with his Indian counterpart.
“Our Indian friends have always been categorical in terms of their intention to continue economic cooperation and (the) import of oil from Iran. And I heard the same statement from my Indian counterpart,” he said after meeting his Indian counterpart, Sushma Swaraj, in New York.
Whether or not India will be granted a waver, is at this point secondary to the need for such reportage that India is looking for this and that such a thing is possible, to exist at this time. The threat on the speculation that India would face US sanctions would be itself a problem for some sectors of the Indian economy, and so in an attempt to avoid over-hedging on the part of those sectors.
Indian firms that may hypothetically find harm under US sanctions could cause them to over-hedge, the situation in which these firms set up an offsetting position that exceeds the firm’s actual risk. Once the actual relations and channels are established, and the new opportunities are congealed which in turn create new speculative channels, the ‘gradual let-down’ can be rolled out in such a way that on the balance, there is no capital flight.
But the real signal here is that the US is willing to publicly also disclose that a waiver is possible, this means that it can also not send the wrong signals to the speculative class which dominates the entire US economy, that in its gambit to shore up the empire and force countries to choose Atlanticism over Multipolarity, it will not by way of hubris or over-playing, engender the very multipolarity they presently work against.