Indian and Iranian authorities have resolved a seven-month long dispute over the payment mode for trade in crude oil, managing director of the National Iranian Oil Company (NIOC) Ahmad Qalebani said on Sunday.
Iranian oil ministry?s website SHANA, the Persian acronym for Petroenergy Information Network, said quoting Qalebani that the arrear payments would be settled this week.
?Following bilateral negotiations, the two sides agreed to settle the outstanding bills as soon as possible,? SHANA said quoting Qalebani. It also said that related bank accounts have been announced to the Indian side and that Iran?s oil exports to India are going on as usual. Sources said that Indian importers like MRPL, Essar Oil, HPCL and IOC will route Euro payments through the Union Bank of India and Turkiye Halk Bankasi (Halkbank) in Istanbul to settle thepayments to NIOC.
NIOC had stepped up pressure on Indian companies earlier this month by not providing a schedule for oil supply in August, prompting refiners to seek alternative sources such as Saudi Arabia, Kuwait and Iraq.
India imports 400,000 barrels per day (bpd) ? 12% of its daily requirement ?from Iran. Import of crude from Iran ran into problems after the RBI said in December that payments to Iran can no longer be settled using a clearing system of regional central banks. The central bank discontinued the earlier system under pressure from the US, which is trying to isolate Iran for its uranium-enrichment programme.?This has created uncertainty on the availability of crude to Indian refiners, particularly the Mangalore Refinery and Petrochemicals Ltd, that imports about 1,80,000 tonne of crude from Iran every day.
It, however, remains to be seen how the new payment system withstands any likely pressure from the US to isolate Iran.
Sources said that in the absence of a payment mechanism, Indian refiners made one big payment in February through the European-Iranian Trade Bank in Germany, but the US persuaded Germany not to continue with such routing of payments.