India's debt over Iran's oil payment reaches $5 billion

Oil&Gas Materials 18 July 2011 13:25 (UTC +04:00)

Azerbaijan, Baku, July 18 /Trend/

India 's debt over Iran's oil payment is currently $5 billion. Iran has been eager to solve the problem of transferring payment as soon as possible, Mehr News Agency reported quoting Governor of the Central Bank of Iran Mahmoud Bahmani as saying.

"India's payment problem is political. We should not blame the banking system for that. However, we attempt to fight sanctions against Iran", he noted.

Previously the Managing Director of international affairs with the National Iranian Oil Company Mohsen Ghamsari was quoted, saying that Indian refineries completely paid the price of Iran's oil export and that the current problem is transferring money from Iran to India's joint account.

Despite India's debt, Iran continues to export 400,000 barrels of oil per day worth one billion dollar per month to India.

Tension between the two countries for oil payment started on 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, believed by Washington to be used by Tehran for bypassing international sanctions.

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

Iran is the second-largest crude supplier to India after Saudi Arabia and accounts for about 14 percent of the country's oil import bill.