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30 November 2023

Iran 'warns' it could halt India oil supplies


Iran has "seriously warned" India that it could halt crude supplies if New Delhi failed to pay overdue payments hampered by international sanctions against Tehran, the oil ministry said on Sunday.

"We have seriously warned the Indian side of the possibility to halt oil exports if a solution is not found to clear its arrears," Fars news agency quoted National Iranian Oil Company managing director Ahmad Ghalebani as saying.

Iran's state-run company, however, said it was working to maintain its trade with India, which as its second largest client after China absorbs about 20 percent of its crude exports.

These warnings "do not mean supplies have been halted and we have no plans to stop exports to the Indian market," said NIOC director of international affairs Mohsen Ghamsari.

India has been struggling for six months to pay Tehran for the oil supplies, through various Asian and European banking channels -- Germany in particular -- which have been successively closed one after another.

On Friday reports cited unnamed executives at two Indian refinery companies as saying Iran's state-run company had warned them that it could stop oil supplies from August if New Delhi failed to clear its long-pending debt.

As Tehran refuses to be paid in rupees, Indian companies have accumulated a debt of about two billion dollars since April, according to figures provided by the oil ministry to Iranian media.

The possibility of India paying in gold for Iranian crude is one of the solutions under consideration, according to Iranian media.

Iran is the second-largest crude exporter to India after Saudi Arabia but payments have hit hurdles due to international sanctions slapped on Iran over its nuclear programme, which world powers fear masks a military drive.

Despite the Islamic republic's repeated denials over its nuclear ambitions, the United States and the European Union have targeted Iran's banking, financial and vital energy sectors with unilateral measures.

The annual trade between India and Iran stands at an estimated figure of 12 billion dollars annually, with India purchasing some 400,000 barrels of Iranian crude per day.