Oil supplies from Iran not hurt by payments issue: Essar | business | Hindustan Times
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Oil supplies from Iran not hurt by payments issue: Essar

Essar Oil, the nation's second biggest importer of Iranian crude oil, on Monday said supplies from the Persian Gulf country have not been affected after the RBI clamped down on the main conduit Indian companies use to pay for the consignments.

business Updated: Jan 17, 2011 20:44 IST

Essar Oil, the nation's second biggest importer of Iranian crude oil, on Monday said supplies from the Persian Gulf country have not been affected after the RBI clamped down on the main conduit Indian companies use to pay for the consignments.

"We have been importing 3 million barrels of crude oil per month from Iran. There is no change in that status... there has been no disruption in supplies... We continue to import same volumes (this month)," Essar Oil Managing Director and CEO Naresh Nayyar said in a conference call.

Iran is selling crude oil to Indian refiners on open credit after the Reserve Bank of India closed the Asian Clearing Union (ACU) route, a move that effectively bars settlement in US dollars and the euro.

"We hope there will be resolution soon," he said.

Iran has agreed to sell crude oil on credit this month, pending resolution of the deadlock.

Mangalore Refinery and Petrochemicals Ltd, the nation's largest importer of Iranian crude oil, and state refiners Indian Oil Corp and Hindustan Petroleum Corp will get some 6 million barrels of crude on 60 to 90 days' credit.

India has asked Iran to identify a panel of banks, which are not under US sanctions, to route payments to National Iranian Oil Co (NIOC). State Bank of India, the nation's largest lender, is ready to facilitate payments, but is not willing to deal with any bank on the US sanctions list.

The two nations have so far not been able to find a solution on how New Delhi should pay for oil imports from Iran after India's central bank said on December 23 that payments to Iran can no longer be settled using a long-standing clearing house system run by regional central banks.

Officials said SBI has refused to route payments through the Hamburg-based EIH Bank, which Iran had identified as a temporary channel for routing money to NIOC.

NIOC has an account in the bank, but SBI felt since the bank is already under US sanctions, its business in America may be affected by dealings with EIH.

Iran is India's second-largest supplier of crude oil, after Saudi Arabia. India imports USD 12 billion of crude annually from Iran -- about 14 per cent of its total crude import bill. MRPL buys 7.1 million tonnes of Iranian oil, while IOC and HPCL import 3 million tonnes each. Private sector Essar Oil imports about 5 million tonnes.