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India to Settle Overdue Oil Payments to Iran

Service : Economy
TEHRAN, July 22 (ICANA) – To cut or not to cut oil supplies to India… a new dilemma Iran's oil sector is facing… while India is in hot water for up to 5 billion dollars in overdue payments.
Friday, July 22, 2011 8:41:11 PM
India to Settle Overdue Oil Payments to Iran

Head, NIOC International Affairs Mohsen Qamsari has held meetings with the representatives of Indian oil refineries as well as India's central bank and they have promised that the issue will be resolved by the end of next week. He says the oil refineries have already made payments to India's central bank and they are trying to find ways to transfer the money to Iran.

Reportedly Oil India, the nation's second- biggest state-run oil producer, is studying the fields and plans to appoint banks for financial due diligence.

This after Iran and India agreed on a new mechanism through the Hamburg-based European-Iranian Trade Bank in February two months after the Asian Clearing Union bowed to political pressure from the US and barred transfers to Iran.

Iran has been supplying Indian refineries for over 20 years. Experts say that considering both the technicalities and prices offered by other oil producers switching to a new provider is not a cost-effective solution but one New Delhi will have to resort to if it does not find a way to transfer money to Iran soon.

Meanwhile Iranian officials say ceasing exports to India will not affect Iran's total oil revenues since they will be replacing India with new markets.

Moving around 400,000 barrels per day (b/d), Iran is India's second largest supplier of crude oil. In 2010, India imported around 3 million b/d in total, with Iran's share representing approximately 13 percent; therefore how this story ends is important for India

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