"Iran halts oil supply to India"

Oil&Gas Materials 22 July 2011 10:32 (UTC +04:00)

India's state-run refiner Hindustan Petroleum said on Thursday it will not get oil supplies from Iran in August with Tehran insisting on resolving a seven-month-old payment row, reported Reuters.

"We have not got allocation for August. They said the payment issue has to be resolved first," K. Murali, HPCL's head of refineries and international trade, told Reuters.

He also confirmed an earlier Reuters' report that HPCL has sought an additional one million barrels of oil for August from top producer Saudi Aramco.

"We will draw more from other suppliers with whom we have term deals. The year has just begun," he said, adding his firm has made adequate arrangements to replace Iranian volumes for August.

"As of now it suffices. we are going by rolling plan month by month," he said.

Since December, India and Iran have struggled to find ways for New Delhi to pay for imports of 400,000 barrels per day or 12 percent of its oil demand after the Reserve Bank of India halted a clearing mechanism under U.S. pressure.

Going forward HPCL would seek additional supplies from United Arab Emirates, Kuwait, Iraq and Saudi Arabia to meet its oil needs, Murali said.

HPCL runs a 130,000 barrels per day (bpd) refinery in Mumbai and a 166,000 bpd facility at Vizag. HPCL has a term deal with National Iranian Oil Co to annually buy 70,000 bpd oil.