India's debt to Iran increases by $1 billion each month

Oil&Gas Materials 13 July 2011 12:34 (UTC +04:00)

Azerbaijan , Baku, July 13 /Trend/

Iran exports $1 billion oil monthly to India while the value of Iran's annual export to India is estimated at $12 billion, Mehr News Agency quoted Managing Director of international affairs in National Iranian Oil Company Mohsen Ghamsari as saying.

"Currently Iran's annual crude oil export to India's refineries is worth $12 billion," he said.

The two countries are negotiating to solve the payment issue. It is expected that the dispute will soon be resolved, he added.

In the meantime, Iran may receive gold instead of foreign currency from India, depending on approval from the Central Bank of Iran.

Tension between the two countries for oil payments began December 23 when India's Central Bank (Reserve Bank of India) placed restrictions on transactions with Iran through the Clearing House System (Asian Clearing Union), that Washington believes Tehran has been using to bypass international sanctions.

India has agreed to stop paying for its Iranian oil imports via Germany since German Chancellor Angela Merkel had intervened by instructing Germany's central bank (Deutsche Bundesbank) to stop clearing payments from India headed to the bank, EIH, which is under U.S. but not EU sanctions.