Reuters reported that Indian companies have paid the first installment of their Iran oil debts.
Mr Pranab Mukherjee finance minister of India said that as money owed on shipments of some 400,000 barrels per day had risen to nearly USD 5 billion.
Mr Mukherjee said that India and Iran have resolved their problem over payments, which started at the end of last year when under US pressure, the Reserve Bank of India scrapped a long standing regional clearing house mechanism. But the new payment mechanism which uses Turkey's state owned Halkbank to route payments to Iran has not received the US Treasury's blessing.
Ms Marti Adams spokeswoman of Treasury Department said that "Treasury has not been consulted on this conduit and has therefore not offered a view.”
Washington wants to isolate Tehran over its nuclear program which it says Iran is using to develop weapons and although there is no international ban against buying Iranian crude, US sanctions that prohibit transactions with some 21 Iranian state banks make financing difficult.
Iran had supplied oil to India essentially on credit for much of this year before announcing last month that it would halt August shipments until payments resumed. The new Halkbank arrangement appears to provide a way out of the impasse.
Indian refiner Hindustan Petroleum said that it had already paid USD 150 million would make USD 45 million payment on Tuesday and hoped to clear USD 1.01 billion in debts to Iran by next month. It hoped crude deliveries from Iran would resume in September. The company and fellow refiners Essar and BPCL took an additional one million barrels from Saudi Arabia in August to make up for the halt in Iranian shipments.
Mr PK Goyal head of finance at Indian Oil Corporation said that Indian companies have opened an account with Union Bank of India which is making the payments in euros to Halkbank, which is then transferring funds to National Iranian Oil Company's account at the bank. The company had paid Iran USD 73 million using the arrangement.
(Sourced from Reuters)
