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India Team to Visit Iran Soon to Discuss Payment Mode for Crude-Oil Imports

India Team to Visit Iran Soon to Discuss Payment Mode for Crude-Oil Imports
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Τετ, 27 Νοεμβρίου 2013 - 19:31
India is planning to soon send a delegation to Iran to discuss payment modes for crude oil imports in the wake of a deal between Tehran and major world powers that could head off further sanctions on the oil-rich nation.
India is planning to soon send a delegation to Iran to discuss payment modes for crude oil imports in the wake of a deal between Tehran and major world powers that could head off further sanctions on the oil-rich nation.

 Iran reached a landmark security agreement Saturday with the U.S. , along with other permanent members of U.N Security Council and Germany , that relates to curbs on its uranium-enrichment capacity and allowing increased monitoring of its nuclear program for six months. While sanctions on Iran 's sales of crude oil are yet to be eased, analysts expect the weekend deal to eventually lead to a loosening of existing restrictions on dollar-based payments.

 India and Iran presently have a barter trade system in place to bypass payment problems due to the western sanctions. Under an agreement last year, India pays for about half of its crude oil imports from the Middle Eastern country in Indian rupees instead of U.S. dollars.

 India 's oil secretary Vivek Rae told reporters Wednesday that the two sides will soon discuss payment mechanisms for purchases of Iranian crude.

An analyst said Tehran may look to repatriate more of its offshore foreign-denominated assets if blockades on international channels are eased following a deal on the nuclear program.

The development is likely to mean that India may be able to gradually increase its crude oil purchases from Iran , but may have to limit the scope of rupee payments -- a facility that has been helping New Delhi trim its current account deficit.

Mr. Rae said India is likely to import around 11 million metric tons of crude oil from Iran this financial year, which is about 15% less than last year. India , along with other countries such as China and South Korea , has been reducing its purchases of Iranian crude in line with U.S requirements.

It is too early to take a call on whether India can increase crude oil purchases from Iran following the deal, said India 's oil secretary. "Let's wait for six months and see how things stand," he said.

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