Halt in Iranian oil supplies to India to damage both countries

Halt in Iranian oil supplies to India to damage both countries

Azerbaijan, Baku, July 7 /Trend, T.Konyayeva/

Tehran and New Delhi should resolve the issue of payment for Iranian oil through a peaceful and diplomatic way, because a cardinal solution to the problem by stopping the supply of Iranian oil to India would damage both countries, said Paul Sullivan, Professor of Economics at the U.S. National Defense University and Georgetown University.

"Both sides should work out this issue diplomatically and smoothly," Sullivan wrote Trend in an email. "If Iran cuts off its oil to India that would be proof positive of severe irrationality in some of the leaders of Iran. It could also cause great hardship in India, a country with many people who already facing hardships."

On July 4, source at the Iranian oil ministry said that Tehran's recent warning notice to New Delhi about a possible halt in oil supplies to India due to continued overdue payments was not a formal letter from the National Iranian Oil Company (NIOC), Fars News Agency reported.

Earlier, the Wall Street Journal quoted executives at two Indian refiners as saying that they have got the letter from NIOC 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.

India owes Iran $2 billion for oil supplies in recent months because it coudln't transfer money to Iran due to U.S. sanctions on IRI, which Washington suspects of seeking nuclear weapons.

According to Sullivan, Iran could send an official letter because Iran's oil industry is run mostly by the government.

"Iran's leadership is playing with fire on this. India is a powerful country. The Iranians may just lose a large market in India if they are too harsh with them. Once again we see short term thinking harming strategic thinking in Iran," he told.

Iran is the second largest crude supplier to the country after Saudi Arabia and accounts for about 12% of India's annual oil needs.

Sullivan thinks Saudi Arabia could fill in some of the oil lost as could the UAE.

The two countries are trying to negotiate a new payment mechanism since December when the Reserve Bank of India stopped 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.

In early February, India and Iran decided to introduce a new mechanism for payment by India. Under the new payment mechanism, the Indian oil companies will transfer funds to the account of the National Iranian Oil Company in Hamburg-based Europäisch-Iranische Handelsbank (EIH Bank) through the Reserve Bank of India.

But later Germany stopped accepting money from India for Iranian oil payments following criticism from the U.S.

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.

On July 6, Iran's caretaker Oil Minister Mohammad Aliabadi said Iran will not cut oil supplies to India, which will find a way to pay for its exports within the next two months, Reuters reported with reference to IRIB website.

National Bank of Georgia talks decrease in export of goods
National Bank of Georgia talks decrease in export of goods
Georgia's international reserves up
Georgia's international reserves up
Georgia supports people losing jobs amid COVID-19 crisis
Georgia supports people losing jobs amid COVID-19 crisis
Loading Bars
Embraer says China, India are potential partners after failed Boeing deal
Dmitry Pankin: BSTDB is able to redirect additional funds to help SMEs amid COVID-19
Azerbaijan's Azercosmos expands satellite services export
Turkey's export to OIC member states shrinks
Turkish BOTAS discloses volume of oil shipment from Ceyhan terminal
Volume of cargo transshipment from Portugal via Turkish ports disclosed
Turkey's export to BSEC countries from Jan. through Apr. 2020 slips
National Bank of Georgia talks decrease in export of goods
Turkish Petroleum Corporation appeals to ministry to extend license
Turkmenistan launches new project to support startups
Industrial products prices drop in Kazakhstan
Azerbaijan reports 168 new COVID-19 cases
Gas production by Shah Deniz since 2006 disclosed
Cargo transshipment data via Turkey's BOTAS port revealed
Georgia's international reserves up
Uzbekistan eyes setting up national freelancer center
Central Bank: Azerbaijan expects further decrease in inflation
Turkish ministry discloses data on cargo transshipment via Izmir port
Cargo transshipment via Turkish Ambarli port from Jan. through Apr. 2020 disclosed
Data on payment cards issuance in Kazakhstan revealed
Value of insurance fees in Azerbaijani market from Jan. through Apr. 2020 disclosed
Food safety certificates turn to electronic format in Azerbaijan
Azeri-Chirag-Gunashli: BP reveals oil output volume since 1997
Azerbaijan discloses data on payments in insurance market from Jan. through Apr. 2020
Georgia supports people losing jobs amid COVID-19 crisis
Uzbekistan organizes more charter flights to bring citizens back
Kaspersky providing advanced cybersecurity to Azerbaijani companies amid COVID-19
Iran resumes fuel shipment to Venezuela
Dutch bar terraces fill quickly as lockdown ends
Nasdaq postpones Philadelphia trading floor reopening due to protests
Shipping locks overhaul underway in Kazakhstan to minimize accidents risks
Azerbaijani Central Bank discloses volume of restructured loans
Central Bank: Situation in Azerbaijan's financial sector is satisfactory
Iran's Fars Province to increase wheat production
South Korean Samdong plans to create solid waste recycling cluster in Uzbekistan
JP Morgan: Minimal oil production shut-ins to remain in place through September
Restaurants, malls reopen in Georgia
Uzbekistan supports non-governmental medical organizations
Switzerland’s EuroChem Group AG increases ore output in Kazakhstan
Uzbekistan prepares to launch new resort zone
National Statistics Office of Georgia changes unemployment measurement methodology
Fiat ahead of Volkswagen, Renault in sales on Turkey's car market
Azerbaijan's State Oil Fund discloses amount of funds sold at foreign exchange auctions
Azerbaijan Micro-finance Association talks supporting women's entrepreneurship
Turkey-Turkmenistan trade turnover grows
Imports of goods from China to Georgia down
Spring field work completed in some Kazakh regions
Uzbekistan takes additional steps to join World Trade Organization
Bulgaria updates on construction of Balkan Stream
Turkmenistan, Iran review construction of disinfection facilities on border
Cargo transshipment through Turkish Tekirdagh port revealed
One of Uzbekistan's biggest refineries eyes to halt RON-80 fuel production
Kazakhstan reconsiders recommended rates on deposits in national currency
Azerbaijan discloses amount of debts due from liquidated banks
Weekly review of Azerbaijan's precious metals market (May 22-29)
UNDP in Turkmenistan opens tender for lab equipment procurement
Belarus raises export duties for oil, oil products
Azerbaijani PMD Group's major construction project nearing completion
Weekly review of Azerbaijani currency market (May 22-29)
Another company gets geological exploration license in Kazakhstan
Georgian wine export to China declines
Azerbaijan to apply new transport rules for intercity buses
UNICEF Uzbekistan opens tender for development of intranet
Kazakhstan's economy slowdown to significantly weaken banks' asset quality, performance
Iran reveals fuel production by IRGC-owned refineries
Black boxes from crashed Pakistan jet head to France for analysis
Buffett-backed BYD to supply EV batteries to Ford
Right to learn for every child (PHOTO/VIDEO)
Iran's Khatam Al-Anbiya construction headquarters talks its railway projects
Refinery operators need three steps to stay alive amid COVID-19
Iran to implement more control over car sales and production
Iran likely to begin paying loans to businesses
TOP-8 Turkish LPG importing companies disclosed
Turkey's import of LPG from US nearly doubles
UNDP in Turkmenistan to buy chemicals via tender
UNDP in Turkmenistan opens tender for website design
Uzbekistan slows down inflation
New bus terminal to be built in Turkmenistan’s Dashoguz region
Kazakhstan’s KazMunayGas reduces expenditures within anticrisis measures
Iran reveals its COVID-19 data for June 1
Kazakhstan Aviation Industry to launch unmanned aerial vehicles production
Emirates could take four years to resume flying to entire network
OPEC, Russia discuss extending oil cuts for 1-2 months
Britain reopens markets and some schools as lockdown eases
Azerbaijani Bank Respublika's shareholder composition changes (PHOTO)
Georgia's foreign exchange reserves decline
Trade turnover between Turkey, France declines
Baku's industrial production volume from Jan. through Apr. 2020 disclosed
ADB study maps supply chains for key products in COVID-19 response
SOCAR's Turkish subsidiary discloses sales volume
Geostat reveals TOP 10 goods exported from Georgia to Azerbaijan
Videoconference initiated by ADB held between Azerbaijani president and bank’s senior executives PHOTO)
Georgia implements new hotel complex project
Azerbaijan reveals data on Baku's trade turnover for 1Q2020
Uzbekistan holds talks with European media platform to promote its goods
Azerbaijan sees growth in electrical equipment production
Georgian flour producer to export its products to Greece, other Balkan states
Review of data on construction work in Baku from Jan. through Apr. 2020
Food prices in Uzbekistan increase
Petrofac secures new five-well contract
All news