Iran’s Best Friend, Obama, About To Deliver On His Campaign Promise: Change We Can Believe In…
India and Iran have agreed to use European banks to process pending oil payments to Tehran, India’s Oil Minister Dharmendra Pradhan told Reuters, unlocking $6.4 billion in stalled funding. Buyers of Iranian oil had been prevented from utilizing global banks to clear their transactions after sanctions were imposed on Iran in 2011. Now that those sanctions have been lifted, Iran is finally getting these funds.
Indian refining companies had been holding 55% of its oil payments to Iran after a route to make payments through Turkey’s Halkbank was stopped in 2013, although payment of some of those funds was allowed after an initial temporary deal to lift the sanctions.
“There is an agreement between (India and Iran’s) central banks. European banks will be the clearing agent. They will be dealing with Iranian banks and we have to pay those European banks,” Pradhan told Reuters in an interview.
Furthermore, Indian refiners had been depositing 45% of oil payments to Iran in rupees with India’s UCO Bank. Tehran thus utilized the funds to import non-sanctioned goods from India. Indian government sources previously stated that Iran had asked India to consider operating through Europaeisch-Iranische Handelsbank (EIH) of Germany, Central Bank of Italy and Halkbank of Turkey. One source said the Reserve Bank of India (RBI) has ruled out channeling funds through Halkbank.
“Halkbank’s Iran-related foreign trade activities with Iran have been carried out since 2004 … Halkbank will continue its operations in accordance with international law,” a senior Halkbank official told Reuters.
No immediate comment was available from EIH and Central Bank of Italy.
The government sources are saying Indian refiners will now make payments to Iran through state-owned UCO Bank in a staggered manner.
“Oil companies are working out the banking arrangements in coordination with Iranian counterparts and payments will be made by them presumably over time with minimal impact on the market,” an RBI spokesperson said on Thursday.
Despite the sanctions, India continued its engagement with Iran and was among a handful of countries that sourced oil from Tehran. Iran had been India’s second-biggest oil supplier before the sanctions hampered its trade relations, but now that President Obama has lifted the sanctions, India is set to import at least 400,000 barrels per day of Iranian oil this year.
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