Concerned over how the fresh US sanctions against Iran imposed earlier this month could affect India’s crude oil imports, policy makers in New Delhi led by National Security Adviser Shivshankar Menon will on Tuesday explore possible ways of protecting supplies from the country’s second largest crude oil supplier after Saudi Arabia. The National Iranian Oil Company (NIOC) supplies about 12 million barrels every month to Indian refiners.
?If the new US sanctions are backed by the EU, then the present payment mechanism through Turkey will no longer be available,? said a senior government official, who is privy to the development.
India’s crude oil imports from Iran has witnessed a dispute over the payment mechanism after the Reserve Bank of India last year scrapped a payment mechanism called the Asian clearing union, apparently under pressure from US that wants to penalise Tehran for its nuclear enrichment programme.
India has so far made payment of 1.5 billion euros to NIOC since then outside the system that existed earlier.
The US Senate earlier this month called for drastic measures against any foreign financial institution dealing with Iran’s central bank. The new sanctions target Iran’s petrochemicals industry and even small goods and service providers to its oil sector.
According to overseas reports, the new sanctions threaten foreign banks that do business with Iran’s central bank to
be cut off from the US financial system.
The US has already forbidden its own banks from dealing directly with the Iranian central bank.
The latest round of sanctions follow a recent United Nations report that linked Iran with the development of a nuclear weapon.
Tuesdays meeting in New Delhi will be attended by senior officials from the ministries of finance, petroleum and natural gas, commerce, external affairs and the RBI.
The government is also thinking of sending a team of officials to Tehran to find a permanent way out of the payment crisis.
