 Hello and welcome to NewsClick. A few days ago, the US government announced that all waivers and sanctions for importing oil from Iran would expire on May 1st. This effectively means that any country which imports oil from Iran after the date faces US sanctions. India is one of the major importers of oil from Iran. And to know more about this decision, as well as the impact on the Indian economy, we have with this ambassador, Talmi Zahmid. Ambassador Ahmed was the former ambassador to Saudi Arabia, Oman and the UAE and was also an additional secretary at the Ministry of Petroleum and Natural Gas. Thank you, Ambassador Ahmed for joining us. Thank you. Thank you for the invitation. Sir, could you first talk about your evaluation of India's response to the US decision, unlike China and Turkey, which have been more defined. India has indicated that it will accept the US decision and said it will make alternate arrangements. So, how do you evaluate the response? I think India is keeping its options open. There is no way India can overnight go into zero imports, which the Americans are insisting on. This is a serious problem for India because in Washington today you have what is effectively a rogue regime. It is a regime that neither understands nor implements international norms and rules. It is the world to accept this scenario in total. You have a president who because of deep-seated personal prejudices, initiates certain policies. The policies are articulated aggressively. They are pushed forward in a very hostile manner against a nation that obviously has done no wrong. I mean, we have a nuclear agreement. The Iranians have fulfilled all their obligations. This is a solemn agreement that not only was approved by the United States, it was approved by all the United Nations Security Council members and is part of the UNSC resolution. So, then beyond the UN resolution, beyond the nuclear agreement, the president has now gone on to tightening the sanctions. I see this effectively as blackmailing the international community for reasons that are completely unfathomable as far as I am concerned. I mean, you are telling countries which have good relations with Iran, which have very substantial ties with Iran connected with their national interest to effectively cut off these ties. I cannot see any rationale for this. So, I think that what you will really see is a scenario where over a period of time, the United States continues to discredit itself, lose all credibility, and the international community will say, go to hell. As far as India is concerned, I think at least India is the second largest importer of oil from Iran and the oil India was getting was actually quite cheap and some of the payments were even made in kind. And even some of the refineries are actually very suited to Iranian oil. So, how do you see the economic impact in India considering the nature of changes it will have to make? I think this is going to be a disaster for India. We are not only major importers of Iranian oil, but Iranian oil is sold to us at concessional rates because of the line of credit given to us for 60 days. We also have, they take care of the insurance and freight as well. So, the landed cost of Iranian oil is far cheaper than any comparable oil that you might get. For example, you have seen in the media, certain other countries like Saudi Arabia and the UAE have hastened to say that we will make up for Iranian oil, but you cannot make up for these concessions. Saudi Arabia does not sell oil at concessional rates ever. Now, when you buy oil with a line of credit of 60 days, do recall that within this period that crude oil gets monetized and you have already sold in the open market, very often in the international market, you have actually sold the product. So, you are paying back after you've already monetized the import. It's a very major aspect. So, I would say to you that there are two aspects to this. One is economic, commercial and economic, and the other is political. As I am very clear in my mind that the Indian government will take a principled position here. We may not do it crudely. It is not our style and that is not how diplomacy works. This is a crude, Trumpian style. It is not the Indian style. We are not crude in our approach, but I think we have conveyed a message to the Americans that don't push us around beyond the point. We have crucial stakes. We are close to you. We have interests that are common between us, but there is a point at which we will have to part company from you. So, you believe that the Indian government will at some level manage to defy the US Dictat on this? See, let us not use harsh words like defy. The United States does not rule the world. It is not our mother country. It is not an imperial authority over us. So, they have got certain domestic issues. This legislation has nothing to do with the international community. It is purely a domestic legislation. So, it is an extrajudical enforcement. This has no sense. It has no legal validity in the international community. What you are effectively telling the international community that I am blackmailing you, that because I have a certain agenda, you may not accept that agenda at all, but because I have that agenda, I am going to insist that you follow my point of view, otherwise I am going to cut off economic links with you. I am sure there could be a scenario which is not to be ruled out and it was in practice earlier that we will find ways in which we will meet our requirements outside the U.S. sanctions framework. So, maybe some of the possibilities include the alternative payment mechanisms that the EU has introduced or Russia has introduced for that matter. No, and we had done it ourselves. If you remember, we had done it. There are ways, firstly, various payment mechanisms. Plus, you have the barter system. We have increasingly the use of other currencies. See, that restriction is on the use of dollars. There are various ways in which you can do. And you also know from the history of sanctions that sanctions have a very short shelf life, particularly when they have no credibility and serve no useful purpose. Beyond the narrow agenda of a rogue administration, I do not see any justification for what is being implemented and I am personally convinced that it will wither away on the wire. And going to the international oil market as we see it. So, on the one hand, we have already have sanctions on Venezuela, which is another major exporter of crude. And now the sanctions on Iran are even more harsh than they used to be. And while Saudi Arabia and the United Arab Emirates have been touted as possible replacements, there are also OPEC restrictions on how much they can produce. So, do you see the possibility of a massive hike in oil prices across the world and related economic issues that are happening? Increase in oil prices is already taking place. You have seen W2I has reached 66 dollars and Brent has reached 74 dollars. So, there has been an increase already over a period. Now, you have a complex scenario. In order to bolster prices, OPEC and its associates outside OPEC have already curtailed production. Now, you have Trump putting pressure upon them to increase production. But these are countries crucially dependent on oil revenues. So, they can only go along with the US agenda up to a point. In the short term, they may try to say, oh yes, we will increase production, etc. But there is a limit. You cannot go beyond this. Iran is a major role player in the oil economy, global oil economy. You cannot just decide that because it suits your short-term advantage and appeases certain constituencies at home that you are going to do something that has absolutely no political or economic justification. And finally, how do you see Iran's situation right now, the internal situation that is? Because the oil production export has decreased obviously. And that was a major source of revenue. Iran is obviously under considerable pressure. But this is not something new. Ever since you had the Islamic revolution in 1979, this country has been under sustained pressure by a combination of interests linking the United States and the Israelis. They have an agenda. Their agenda is to ensure that in West Asia, there is no viable nation that is capable of balancing Israel's interest in the region. And Israel has a maximalist agenda. They therefore have been associating the Americans with the systematic destruction of various entities in the region. Whether it was Iraq earlier or later on, it was Libya and Syria. This has been part of an agenda. Iran is the one country that is standing up to this coalition. And that is why Iran has been subjected to this kind of pressure. There is an extreme right-wing element in Israel as well as in the United States that is working together. And that seems to enjoy the support of Donald Trump. I'm not sure that Trump has fully understood the full implications of what he's up to. But I don't think he cares. As far as he's concerned, he's a populist leader. He panders to a narrow constituency. It doesn't matter that he has the lowest approval rating that the U.S. president has ever had. He's going to be around for some time. But he's wreaking destruction, disorder and also deep-seated insecurity. As far as Iran is concerned, they have been subjected to sanctions from 1979. They have become increasingly onerous. Nearly 10 years ago, the Obama administration had put sanctions on oil as well as on financial transactions. But then they had engaged with Iran and this engagement had culminated in the nuclear agreement. Donald Trump tells us that he wants the Iranians to come to the negotiating table. But how can you get a country to come to you and sit in front of you when you have lost all credibility whatsoever? If they wanted to engage with Iran, the best way forward would have been to work with the Iranian government, not to reject an existing agreement, but discuss with the Iranian government how you could go forward with regard to issues that agitate you. This was done by the Obama government and it could easily have been done by the new American administration. But this kind of abusive and this kind of aggressive and hostile approach is the last approach you need when you want to get someone to come to the negotiating table. Yes, there is a state of the Iranian economy has been certainly under pressure and there have been from time to time public agitations from sections of their community. But there is no way you are going to have a regime change in the country. There is no way any Iranian government is going to sit in front of the Trump administration to negotiate. This is not the way countries function. If you want to have a viable agreement, it has to be on the basis of mutual trust and it should result in a mutually beneficial arrangement. Thank you so much, sir. Thank you. That's all we have time for today. Keep watching Newsclick.