NEW DELHI – Iran’s national oil company has refused to accept payments for oil sales to India without Reserve Bank of India (RBI) guarantees, sources said, prompting a meeting of their central banks over another obstacle to trade with Iran.
The Islamic Republic is under global pressure over its nuclear programme and although United Nations sanctions do not forbid buying Iranian oil, the United States has pressed hard for governments and companies to restrict dealings with Tehran.
The RBI has 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. India is the biggest buyer of Iranian crude in the group, gobbling up around 400,000 barrels per day between two state-owned refiners and privately-owned Essar Oil.
Indian industry sources said on Wednesday that National Iranian Oil Co (NIOC) turned down Indian oil firms’ request for payment outside the ACU. “Indian firms had asked Iran to immediately nominate a bank in Europe through which payment can be made. But NIOC refused,” said one of the sources.
When asked if NIOC was willing to accept any mechanism outside ACU, a NIOC source said: “It is not acceptable to NIOC as this mechanism is in place for so many years.” “How can India unilaterally decide to halt it without any alternative mechanism? How can you demolish a building without renting out an apartment?”, the NIOC source said.
Iran’s central bank requested a meeting with its Indian counterpart, the RBI said on Wednesday. “The central bank of Iran has sought a meeting with the RBI,” the spokesperson said. “No date has been fixed yet.”
