NEW DELHI: Indian refiners have asked the government to clarify if they can pay Iran for crude in euros after the National Iranian Oil Company (NIOC) requested settlement of some debts through a Turkish bank, Indian officials said yesterday.
Western sanctions aimed at forcing Iran to curb its nuclear programme have more than halved Iranian oil exports and all but halted the flow of petrodollars into Tehran's coffers. The sanctions have cost Iran billions of dollars a month and crippled its economy.
The US in February tightened sanctions further by forcing Iran's remaining oil buyers to stop transferring cash payments to Tehran, and instead keep the money in bank accounts in the currency of the importing countries.
Those sanctions cut the payment route Indian buyers had used to pay for over half their imports, which was to transfer euros to Iran via Turkey's state-owned Halkbank.
India is Iran's second-largest buyer, and with no payment route, the cash has quickly piled up. India now owes Iran about $5.3bn for oil imports, government and refining sources said last week.
In mid-October, NIOC informed Indian refiners that Halkbank was ready to restart channelling the payments to Iran, the sources told Reuters, declining to be named due to the sensitivity of the matter. NIOC said it had been informed that Halkbank could be used again by Iran's central bank.
It was unclear from the communication from NIOC what had changed that would allow the payments to restart without contravening US sanctions, the sources said.
Halkbank declined to comment.
Indian refiners have yet to restart payments via Halkbank and have asked the government for guidance, the sources said.
Reuters
