Sep 20, 2018, 10:52 AM
News Code: 83038381
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India to pay for Iran oil in rupee: Indian media

New Delhi, Sept 20, IRNA - Indian refiners will pay for oil from Iran in rupee, using UCO Bank and IDBI Bank, from November 4 when petroleum-related sanctions against Iran take effect, Indian media reported on Thursday.

The India’s Economic Times quoted “people familiar with the matter” as saying that India has also offered to cut its oil purchase from Iran significantly to secure a waiver from the US to continue its imports.

Without a waiver, an oil trade or financial transaction with Iran risks cutting India off the US financial system.

“Indian Oil Corp, Mangalore Refinery and Petrochemicals (MRPL) and Nayara Energy (formerly Essar Oil) are some of the heaviest Indian importers of Iranian oil that comes with cheaper freight and a longer 60-day credit period,” wrote the paper adding, “Indian refiners’ plan to lift Iranian oil in September and October means they would need to pay for these after the sanctions have become effective on November 4.

“These payments will be made in rupee by refiners, people familiar with the matter said. The government has identified UCO Bank and IDBI Bank to route oil payment to Iran since both these banks have no exposure to the US financial system, they said, adding that UCO Bank will be the preferred partner since it has handled this during previous sanctions.”

Following its withdrawal from the landmark nuclear deal officially known as the Joint Comprehensive Plan of Action (JCPOA) on May 8, the US has given 90 to 180 wind-down period to other countries before it starts re-imposing sanctions on Tehran on November 4.

Many US allies, including India, have been trying to find an exemption from US anti-Iran sanctions.

The issue was one of the major topics discussed during a visit to India on September 6 by US Secretary of Defense James Mattis and its Secretary of State Mike Pompeo.

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