Iran warns India over oil export

Iran warns India over oil export

Tehran: Iran warned India on Monday that it would stop exporting oil to India from 1 August if a financial dispute over payment was not resolved, the semi-official Fars news agency reported.

“Iran might stop giving permission to export its oil to India from 1 August if the dispute over receiving payments from India is not resolved," an unnamed oil official told Fars.

National Iranian Oil Co (NIOC), the state oil firm that supplies around 12% of India’s oil imports, set the deadline in a letter dated 27 June to Indian refiners, sources told Reuters in early July.

The official told Fars that the letter was not sent officially by NIOC.

“The (previous) warning was not sent by NIOC officially and it was not a warning over stopping exports to India completely," the official told Fars.

Iran, facing increased isolation internationally, and energy-hungry India have been looking to resolve an impasse triggered in December when the Reserve Bank of India ended a regional clearing mechanism under US pressure.

Analysts say Iran is putting pressure on India to accelerate the resolution of the payments mechanism dispute.

Iran says India owes it $5 billion for oil imports in recent months. Earlier this year, Germany allowed India to pay for the oil via Hamburg-based EIH bank, which handles international trade for Iranian companies.

But India halted that conduit in early April after discussions with German Chancellor Angela Merkel, and EIH has since come under EU sanctions.