Reuters reported that two Indian refiners will not get crude from Iran in August after Tehran warned it would stop supplies as outstanding debts in a long running payment issue mount to over USD 5 billion.

While one of the refiners has been told by Iran that there will be no supplies in August, the other has made alternative arrangements as it heard nothing from the Islamic Republic after a letter on June 27 threatening to halt supplies.

Since there was no communication from Iran after June 27, we assumed there would not be any supplies in August and accordingly made arrangements. They have not made any allocation for us.

India and sanctions hit Iran have been trying to find ways for New Delhi to pay for 400,000 barrels per day or 12% of its crude imports since December 2010 when the Reserve Bank of India halted use of a clearing mechanism under US pressure.

After the warning by Iran, Indian refiners are seeking extra barrels from elsewhere including their top supplier, Saudi Aramco and the United Arab Emirates.

(Sourced from Reuters)