Iran has warned it will stop crude oil supplies to India from August if its long-pending bills aren't cleared and a favorable mechanism for future payments isn't set, executives at two Indian refiners said Friday, The Wall Street Journal reported.
"We have got the letter from National Iranian Oil Co. They are saying supplies can be halted," said an executive at Mangalore Refinery & Petrochemicals Ltd..
An executive at Hindustan Petroleum Corp. added that payments are being lined up and will be made shortly.
The two countries are trying to negotiate a new payment mechanism after the Reserve Bank of India in December stopped trade-related payments through the Asian Clearing Union, which the U.S. says is opaque and could be used by Tehran to finance its alleged nuclear weapons program.