Fartashphoto's Blog

Tehran refused to sell oil to India under the prohibitive new rules

Posted in Uncategorized by fartashphoto on December 30, 2010

A payments dispute between India and Iran escalated after Tehran refused to sell oil to India under New Delhi’s prohibitive new rules, sources on both sides said on Wednesday.

The Indian sources said officials from the central banks of the two countries will meet on Friday as Iran seeks to rescue trade worth around $12 billion (£7.7 billion) a year, at risk from rising U.S. pressure on countries trading with Iran to abandon all dealings.

Last week, the Reserve Bank of India said deals with Iran must be settled outside the Asian Clearing Union (ACU) system, used by central banks of member nations to settle bilateral trades.

Analysts predicted talks would be tough and that New Delhi may face a costly bill if it abandons Iranian oil imports.

Iran is under global pressure over its nuclear programme, and though United Nations sanctions do not forbid the purchase of Iranian oil, the United States has pressed hard for governments and companies to stop dealing with Tehran.

India is the biggest buyer of Iranian crude among ACU members, with state-owned refiners and privately owned Essar Oil taking around 400,000 barrels per day.

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