Iran downplays report India paying for oil via Russia | business | Hindustan Times
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Iran downplays report India paying for oil via Russia

business Updated: Oct 29, 2011 20:29 IST
Iranian oil ministry

An Iranian oil ministry source played down on Saturday a report that Indian oil buyers had started paying for their crude through a bank in Russia as a new way to get around sanctions-related difficulties in making international bank transfers.

The semi-official Iranian Mehr news agency said on Friday that importers in India -- Iran's second biggest oil customer after China -- were paying off oil debts through Gazprombank.

"There has been no word of this at all ... No name has been mentioned, not Gazprom nor any other particular bank. These news reports are not valid," said the ministry source.

Indian customers accumulated debts of some $5 billion in the first half of this year when the Reserve Bank of India scrapped a long-standing payment system, under pressure from Washington which is trying to isolate the Iranian economy.

It has since paid off the debts through Turkey's state-owned Halkbank but that conduit remains vulnerable if Washington applies more pressure on Ankara to shut it down.

In the Mehr report, Mohsen Qamsari, deputy head of the National Iranian Oil Company, said Tehran had "reached new agreements for receiving money for Iran's oil exports," but he did not specify any banks or countries involved.

"Iran's central bank has different and diversified ways and methods for receiving its money from selling oil to India ... at the moment there is no Indian accumulated oil debt to Iran," he told Mehr.

An Indian industry source said there had been talks about paying for Iranian oil via Gazprombank but no Indian companies had yet opened an account there and they were still paying through Halkbank.

The Iranian ministry source told Reuters: "Receiving oil money through different methods is being followed up as was always the case."

Iran is India's second biggest oil supplier after Saudi Arabia and exports total about $12 billion a year, meeting about 12 percent of India's import needs.