India says ready to start Iran oil cash transfer after deal

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US Secretary of State John Kerry (R) shakes hands with Iranian Foreign Minister Mohammad Javad Zarif after a ceremony at the United Nations in Geneva November 24, 2013. Reuters US Secretary of State John Kerry (R) shakes hands with Iranian Foreign Minister Mohammad Javad Zarif after a ceremony at the United Nations in Geneva November 24, 2013. Reuters
SummaryOil price slips over $2 after deal; agreement allows Iran to get $4.2 bn in oil money held abroad.

a later date perhaps this money will go to the Iranians sooner rather than later," said the official with direct knowledge of the matter.

BANK TRANSFER

The United States had in February asked Iran's oil buyers to stop transferring payments to Tehran, and instead keep the money in bank accounts in the currency of the importing countries.

Iran was only able to use that money to buy goods and services from the importing country. The cash in the accounts has quickly risen.

It is unclear how much Iran will receive from each country over the next six months under the terms of the deal. Banking and industry sources in South Korea and Japan said they were awaiting details of the weekend agreement before they can decide on how to transfer money to Iran.

South Korea has $5.56 billion stuck in bank accounts, with a similar amount held up in Japan since the beginning of the year, according to sources.

In China, Kunlun Bank, owned by China National Petroleum Corp, holds the Iranian oil dues, but it was not immediately clear how much is locked up.

China is Iran's top oil buyer.

IRANIAN EXPORTS

The weekend agreement freezes U.S. plans for deeper cuts to Iranian oil exports, but does not allow any extra Iranian oil into the market. That means shipments from the OPEC member will hold around 1 million barrels per day, versus the pre-sanctions level of around 2.5 million bpd.

That ceiling means Iran has very little room to boost sales, given that its oil exports in the first nine months of the year have averaged about 1.08 million bpd, according to Reuters data.

Of the total, China bought nearly half, followed by India and Japan which bought about 194,000 bpd each. South Korea purchased 137,000 bpd, while Turkey took about 100,000 bpd.

Iranian exports were also hit by EU sanctions that barred any company based in the region from dealing with Iran. That hit global the reinsurance industry, which is mostly all based in the region, halting coverage on tankers carrying Iranian oil.

Earlier this year, Indian insurers told refineries that plants, ports and pipes would not be covered if they

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