Iran hopes to agree oil payments with India by Tuesday

Iran hopes to agree oil payments with India by Tuesday

New Delhi: Iran hopes to resolve a payments impasse with India over oil shipments by Tuesday, the country’s envoy to India, Seyed Mahdi Nabizadeh, said on Monday.

A delegation from Iran was in New Delhi this week in the latest attempt to try to work out a way for India to pay for its oil imports, five months after a regional clearing mechanism was unilaterally discontinued by the country’s central bank under US pressure.

Iran supplies India with some 400,000 barrels per day (bpd) of oil, second only to Saudi Arabia, filling around 12% of the fast-growing Asian giant’s needs.

Shipments have not been halted but the two sides have struggled to find a replacement method of paying for them which does not contravene international sanctions.

Earlier in 2011, a Hamburg-based bank handling international trade for Iranian companies, EIH, stepped in to handle payments via Germany.

But in early April that route was stopped, with one German newspaper saying Chancellor Angela Merkel had instructed the Bundesbank to stop clearing payments from India headed to EIH, which has since come under EU sanctions.