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Expert: Turkish banks can resolve oil payment problems between Iran and India

Oil&Gas Materials 29 April 2011 09:00 (UTC +04:00)

Azerbaijan, Baku, April 28 /Trend, D.Khatınoglu/

The Oil Ministry of India stated that the issue of payment for oil, imported from Iran, via the Turkish banks will be discussed. The Turkish banks can resolve the problem of payment for oil between Iran and India, the Head of Energy Security Division at the Energy Studies Institute, National University of Singapore Hooman Peimani told Trend.

In December 2010 the National Iranian Oil Company refused to accept payments for oil from the Indian companies after the Reserve Bank of India imposed a ban on the national companies' using a major regional payment arrangements network - Asian Clearing Union - in operations for oil and gas imports.

Although Iran and India agreed in February 2011 to pay for oil via Europäisch-Iranische Handelsbank (EIH) located in Germany, the German government has not allowed it.
In September 2010, the U.S. Treasury Department accused the EIH Bank of making payments to facilitate the financing of Iran's nuclear program, including $3 million in 2007 to acquire material for Iran's missile programs, and in mediation for several Iranian banks, which are closely linked to government. The U.S. Department has added the EIH Bank in its list of financial institutions whose activities are blocked. In February the German Chancellor Angela Merkel personally prevented payment for Iranian oil via EIH.

Peimani, Iranian by nationality, believes that under the U.S. pressure, India and Germany have refused to resolve this problem, but the Turkish banks can assume this mission.
India had $2 billion debt for oil imported from Iran by February. Given that the volumes of Iranian oil export to India have not change and now continue, India's debt to Iran increases. Iran exports 400,000 barrels oil to India per day and is the second largest country exporting oil to India after Saudi Arabia.

Peimani believes that over the recent period, Turkey has been establishing independent relations with the Middle East countries, especially with Iran and avoids to get into pressure of the USA. The Turkish banks can resolve the oil payment problems between Iran and India.

With regards to the insurance of Iranian oil exported to India, Peimani believes that this problem can be resolved not only by the Turkish banks, but also the insurance companies of South America and several African countries. "Thus, there are favorable conditions for the Turkish banks to mediate in payment for Iranian oil exported to India," Peimani said in a telephone conversation from Singapore.

Turkey has expanded trade relations with Iran over recent years. The trade between the two countries has increased by two times to $11 billion in 2010 compared to 2009.
Peimani said that India has been operating and investing in Iran's energy sector for more than ten years, and therefore, can not risk to refuse from the Iranian oil if to take into account the unrests in the Arabian countries.

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