US Iran Deal: After the first round of talks in Switzerland, the US and Iran have reached preliminary agreements on many issues. The most special among these is the 60-day exemption given to Iran for selling oil. This is very important for India in the global energy market and its context. India used to buy a lot of oil from Iran to meet its needs. However, it decreased after the US ban. India is also expected to benefit from the exemption given to Iran in oil export.

60-day MoU

Tehran has got this exemption under the 60-day Memorandum of Understanding (MoU) between the US and Iran. In return, Iran has promised not to hinder shipping through the Strait of Hormuz. Iran will get this exemption for 60 days, which means it can sell crude oil and petroleum products till August 21. This decision was taken by US Vice President J.D. This comes just hours after Vance said that “very good progress” has been made in the talks taking place in Switzerland.

What license is issued by the Treasury Department?

The Treasury Department has issued “Iran General License X”. Under this license, production, delivery and sale of crude oil, petrochemical products and other petroleum products coming from Iran is allowed till August 21. According to the license, all essential transactions related to the production, sale, delivery or unloading of Iranian crude oil, petrochemical products and petroleum products, which were earlier banned, will now remain valid till August 21.

Why is this exemption important for India?

India imports about 85 percent of its crude oil needs. The concession in oil sales to Iran is also important for India. The US-Iran war disrupted oil supply across the world, which also affected India. Now, India is expected to benefit greatly from the 60-day exemption given by the US to Tehran. Before the US imposed sanctions on Iran, India was a major buyer of Iranian oil. After Donald Trump became President in 2019, the US imposed sanctions on Iran, after which India reduced its oil purchases from Tehran. After the Ukraine war, India has emerged as a major buyer of Russian crude oil.

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