Iran to reconsider oil trade with India: FM

Oil&Gas Materials 19 July 2011 14:02 (UTC +04:00)

Azerbaijan, Baku, July 19 /Trend/

Iran may reconsider a deal on export to India due to Delhi's delay in payment, Mehr News Agency reported quoting Foreign Ministry Spokesman Ramin Mehmanparast as saying.

"The oil transaction should be carried in accordance with trading conditions and absence of necessary conditions for payment will have negative effects on the trade," he said.

India 's debt over Iran's oil payment is currently $5 billion and Iran has been eager to solve the problem of transferring payment as soon as possible, Governor of the Central Bank of Iran Mahmoud Bahmani said earlier.

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.